East Anglia ONE Offshore Windfarm Supply Chain Plan

East Anglia ONE Offshore Windfarm

500MW – 600MW Project

Supply Chain PlanAugust 2014

Background & disclaimer

This document is a Shortened Version of the Supply Chain Plan submitted by East Anglia ONE Ltd(“EA1”) to the Department of Energy and Climate Change in August 2014.

This version includes a number of amendments to the Full Version of the Supply Chain Plansubmitted to make the document suitable for publication. The principal changes made toprepare this Shortened Version are the redaction of any content that is commercially sensitive,confidential, otherwise restricted, or may prejudice EA1’s future procurement activities. EA1 hassought to be as transparent as possible in this publication and shall look to disclose furtherdetails of the redacted items where appropriate at future milestone dates of publication.

This document has been provided for information purposes only, and EA1 makes no warranty orrepresentation and shall have no liability to any party who may seek to use its content in respectof any decision or course of action.

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East Anglia ONE Offshore Windfarm Supply Chain PlanBy East Anglia ONE Ltd, a joint venture between ScottishPower Renewables and Vattenfall.

For the Department of Energy and Climate Change, August 2014.

ContentsProject Summary............................................................................................................................................................... 2

1 Introduction .......................................................................................................................................................... 3

2 Competition .......................................................................................................................................................... 4

3 Innovation ...........................................................................................................................................................17

4 Skills.....................................................................................................................................................................24

Annexes commence after page 28

Annex 1 List of Impact Criteria............................................................................................................................................

Annex 2 Evidence................................................................................................................................................................

Annex 3 Supply Chain Case Studies ....................................................................................................................................

Annex 4 Supplier Engagement............................................................................................................................................

Annex 5 Example Roles Required .......................................................................................................................................

Annex 6 Wider Impact on Low Carbon Generation Industry..............................................................................................

Annex 7 Project Programme...............................................................................................................................................

Annex 9 Outline Skills Strategy ...........................................................................................................................................

Annex 11 Definitions...........................................................................................................................................................

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Project SummaryTable 1 Contact details.

Company Name East Anglia ONE LimitedAuthorisedRepresentative

Charlie Jordan, Programme Director

Address

3rd Floor, 1 Tudor Street

London EC4Y 0AH

United Kingdom

Contactnumber

EmailAlternativecontact

David Rowland, Business DevelopmentDirector

Alternative contactnumber

Alternativeemail

Table 2 Project details.

Project name East Anglia ONEProject size (in MWinstalled capacity)

500MW – 600MW

Projectcommissioning date

31 March 2019 Project locationSouth East Area of the Round 3 East AngliaZone, covering approximately 300km2

Is supply chain projectplan included?

Yes Ownership structureScottishPower Renewables (UK) Limited 50%,

Vattenfall Wind Power Limited 50%

Maturity of project

The East Anglia ONE offshore windfarm (The EA1 Project) has planning consent and a gridconnection agreement for December 2018.

Engineering work has commenced and supplier pre-qualification activities are complete fora number of packages with certain tenders already underway and others to commence in2014/2015 to enable progress in line with DECC requirements.

To date around £64M has been spent on the development of the EA1 Project. The expecteddate of construction start is 2017 with first power export in 2019.

East Anglia ONE Limited intends to apply for a Contract for Difference (CfD) during the firstallocation window in October 2014. Due to the long lead time on the procurement of theHVDC transmission system, it is critical for the timely development of the whole zone thatthe first phase is awarded a CfD at the earliest opportunity.

An investment of over £2billion will be required to complete the EA1 Project representingan opportunity to create significant UK economic benefit. This will be the first project in azone which has the potential to deliver 7200MW. The investment in the EA1 Project wouldbe the first investment in the zone which if fully delivered could result in a further£22billion investment making this one of the largest and most important renewablegeneration projects in the world.

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1 Introduction1.1 East Anglia One Offshore Windfarm

1.1.1 The EA1 Project is being developed by East Anglia ONE Limited (EA1), which is a joint venture betweenScottishPower Renewables (UK) Limited (SPR) and Vattenfall Wind Power Ltd (Vattenfall). SPR is the UK’sleading onshore wind developer and is part of the Iberdrola Group which is one of the world’s largest utilitycompanies and the global leader in wind energy. Vattenfall is a subsidiary of the Swedish energy utility whichhas one of the largest portfolios of offshore wind plant in Europe.

1.1.2 The EA1 Project is the first of up to twelve projects in the East Anglia Round 3 zone (EA Zone), one of thelargest offshore wind zones for development in Europe. The zone has very favourable conditions includingthe lowest water depths on average in Round 3, convenient location near demand centres and benefits fromgood wind conditions – hence, it offers from its first project to the last an unparalleled opportunity,anywhere in the world, to progressively drive down the cost of offshore wind.

1.1.3 At between 500-600MW in size, the EA1 Project will be one of the world’s largest offshore windfarms. Thispresents an excellent opportunity to drive competition, innovation and skills.

1.1.4 EA1’s track record in helping to drive forward the UK Offshore Wind industry is demonstrated by its parentorganisations providing:

The original Chairman of the Government-proposed Offshore Wind Cost Reduction Task Force, theOffshore Wind Developers Forum and the Offshore Wind Industry Council (OWIC)

The key industry lead link for the development of the Government’s Offshore Wind Industrial Strategy

The current lead for the O&M work stream of the Offshore Wind Programme Board (OWPB)

A former Chairman of RenewableUK, representatives on its board and its Offshore Wind Strategy Group

A board member of the G9 Industry Health and Safety Group.

A member of the TSB Offshore Renewable Energy Catapult (ORE Catapult) Industrial Advisory Group

A Director of the East of England Energy Group (EEEGR)

1.2 Aid to use of this document

1.2.1 Where a specific impact criteria, specified in DECC guidance, is addressed then this is referenced using thecodes for example [C1] defined in Annex 1. Note that in some cases, impact criteria under competition,innovation and skills are all addressed by the same action that is stated only in one place, so any assessmentof one criterion requires review of all sections.

1.2.2 DECC’s intent to assess this plan against the three criteria, noted below, is also recognised:

(i) The commitments or actions undertaken or planned(ii) Impact on the supply chain as a whole(iii) Impact on the wider relevant low carbon electricity generation industry

To aid scoring, {ii} or {ii, iii} have also been added to identify where the impact of actions fall.

1.2.3 In many instances the actions and planned actions stated in the plan are by Iberdrola, ScottishPower, SPR orVattenfall. EA1 directly benefits from these actions through its relationships as a joint venture and thesharing of knowledge via Iberdrola, ScottishPower, SPR and Vattenfall employees involved in the Project.

1.2.4 Any supporting evidence provided in the Annexes is referenced directly in the text. Where abbreviationshave been used definitions have been provided in Annex 11.

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2 Competition2.1 Overview

2.1.1 Targets - EA1 has set the following UK content and competition targets for the EA1 Project:

The delivery of 50% UK content over the life of the EA1 Project

Laying the groundwork for further increases to 55% UK content over the life for the next 3GW of EAZone projects and 60% for the remaining 3.6GW of the zone

All major contract packages to be competitively tendered

2.1.2 Project Scale and Potential - The size, timing and scope of the EA1 Project mean that it will naturally have asignificant positive impact on competition on the offshore wind sector: [C1,C2,C3,I3,I4,S3] {ii,iii}

At between 500MW - 600MW, the EA1 Project offers sufficient scale to attract new entrants into themarket

The 2019 delivery period is perfectly timed to take advantage of new Wind Turbine Generator (WTG)models in the market

The number of jacket foundations required (75 – 85 units) will help support existing suppliers to invest innew facilities & tooling and entice new suppliers into the market

The physical scale and volume of components being purchased and the duration of the installation phaseshould support investment in new vessels and port facilities and will help to improve project efficiencyand cost

The fact that this may be the first UK offshore project to use an HVDC Grid connection will offeropportunities for UK inward investment to build on the UK’s current engineering expertise in this field

This is the first of between six to twelve physically similar projects in the EA Zone. It offers from its firstproject to the last an unparalleled opportunity, anywhere in the world, to progressively drive down thecost of offshore wind and gives long term market visibility to the supply chain to drive industrialisation,learning and competition.

2.1.3 Parent Company Experience - SPR and Vattenfall, own 13 offshore windfarms in operation or underconstruction, rated at a total of 1.4GW (Annex 2A) and are also developing 17 offshore windfarms, withcapacity of 9.8GW (Annex 2B). The parent companies also develop, construct, own and operate over 100GWof other generating plant. This considerable expertise is available to EA1 in developing the supply chain toimprove competition, innovation and skills. [C3,I6,S5] {ii}

2.1.4 The following sections (Sections 2.2 to 2.9) describe actions generic to all packages and specific actions todrive competition for each tender package. In each section, EA1 addressed the impact of these actions on theproject but also both on the offshore wind supply chain as a whole and on the long-term low carbon energygeneration industry.

2.2 Supporting New Market Entrants [C1]

2.2.1 Progress to date – Iberdrola, SPR, Vattenfall and EA1 have already shown willingness to contract with newentrants to the sector. This is evidenced by the following: [C1,C2,C4,C5] {ii, iii}

The award of the EA1 Project’s largest contract to date with UK company Wood Group for the supply oftwo offshore met masts – encouraging an oil & gas contractor into the offshore wind sector (£17M).Case study in Annex 3.1.

Selection of BiFab, at the time a relatively new supplier to the offshore wind industry, as steel jacketfabricator on Vattenfall’s Ormonde Project.

Deployment of Senvion’s first offshore wind turbines on the Ormonde project.

Iberdrola’s choice of Navantia, a new market entrant, as one of the foundation fabricators on itsWikinger project. Case study in Annex 3.2.

As part of the West of Duddon Sands (WoDS) Project, SPR and DONG Energy (DONG) made a leasecommitment with Belfast Harbour which resulted in an investment of £50M to upgrade this facility. Casestudy in Annex 3.3.

The charter commitment to Swire Blue Ocean made as part of SPR’s WoDS project to support the PacificOrca (a new installation vessel) coming to market. Case study in Annex 3.4.

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2.2.2 High volume of new entrants engaged – Across all of the major construction packages set out below in2.10.1, EA1 has engaged 253 suppliers to date as part of its early and broad market engagement activities. Ofthis total 167 (66%) are either less established or are new to the offshore wind market. A full listing of thesesuppliers and definitions regarding our classifications is provided in Annex 4 [redacted]. Many of thesepotential suppliers are from other industries such as oil & gas and also different geographic locations.[C4,C5] {ii, iii}

2.2.3 Ongoing engagement activity – As part of this engagement EA1 has (and will continue to):

Make prospective suppliers aware of the supply opportunities and provide the suppliers with a chance todemonstrate willingness and capability to be considered as part of the pre-qualification process,discussed further below. [C1,C4] {ii}

Provide newcomers with relevant information and timely engagement with the right people. [C1]{ii}

Work with bodies such as the Offshore Wind Investment Organisation, UKTI, Scottish Enterprise andScottish Development International to identify the valuable public support available for potentialsuppliers to the sector. A list of key enabling organisations relevant to EA1 in developing its supply chainis in Annex 2C. [C1,C2,I6,S5] {ii, iii}

Maintain a working knowledge of the key investment decision criteria for credible potential suppliers

Ensure that each has a specific point of contact within EA1 to engage with about the EA Zone projects.[C1,C4,C5] {ii, iii}.

2.3 Removing Barriers to Entry into the Supply Chain [C2]

2.3.1 Existing activity to remove barriers to entry – Some examples of EA1 activity include:

Helping to overcome constraints (e.g. balance sheet, track record, know-how etc.) by encouragingpartnering between potential new entrant UK companies and other companies with requisite balancesheet, track record or experience. Evidence of EA1’s activity in this area is supported by thememorandums of understanding (MOUs) EA1 has included in Annex 8 [redacted] and is furtherdescribed in 2.14.2. EA1 expect these strong joint ventures to be well positioned to be able to deliverlarge projects, create UK economic benefit and strengthen the business for future opportunities both inthe UK and Internationally. [C2,C4,C5] {ii, iii}

Assessing options promoted by BIS & UKTI prior to making final selection decisions, recognisingGovernment intent to better use export credit arrangements to support UK manufacturing companiesand the Business Bank (action 24 in the Offshore Wind Industrial Strategy). [C2] {ii}

2.3.2 Test site opportunities to prove new technologies and increase competition:

EA1 is planning to use a small area (3 to 5 turbine locations) of the EA1 Project as a demonstration sitefor turbines (of the generation after those listed in 2.12.2) and foundations, in order to reduce barriersto entry for new turbine and foundation models and accelerate competition for future offshore windprojects including the wider EA Zone. EA1 has already discussed this proposal with the Crown Estate.[C1,C2,I1,I2,I4,I5,S4] {ii, iii}

SPR is already showing commitment to promoting competition by developing one of the largest test sitesin the world adjacent to its Wikinger offshore wind project in Germany. SPR has applied for a BSH 1award (a necessary consenting milestone for German offshore windfarms) and is currently awaitingapproval. Once consented this project will have up to 11 test pads available for turbine installation in2016. This should enable EA1 to gain operational insight with its chosen turbine in a cost effectivemanner before the supplier purchases components for the EA1 Project. [C1,C2,C3,I1,I2,I4,I5,I6,S4,S5] {ii,iii}

Vattenfall has already shown significant leadership in driving the development of European OffshoreWind Deployment Centre (EOWDC) off the coast of Aberdeen in Scotland as a key close-to-shorelocation to accelerate supply of new turbines and other areas of supply. This project is now awaiting theconclusion of a Judicial Review of its consent and onshore consent for the cable coming ashore.

Vattenfall also helped develop and part owns Alpha Ventus which was the first German offshore winddemonstration site in 2010 with six AREVA M5000 turbines and six Senvion 5M turbines.[C1,C2,C3,I1,I2,I4,I6,S5] {ii, iii}

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2.3.3 Operations and Maintenance (O&M) approach to reduce barriers: For the O&M phase, EA1 has taken stepsto ensure that barriers to competition and market entry are removed by ensuring that (i) it has sufficientaccess to data and Intellectual property in order to be able to take operational control of the Project at anytime; (ii) it provides a number of technicians to be fully trained in service and maintenance activities by theOriginal Equipment Manufacturers (OEMs), but remain as EA1’s staff; and (iii) have access to keycomponents. This should reduce the dominance of OEMs in the O&M phase and allow EA1 to open theoperation and maintenance contracts to potential third party suppliers in a more competitive environment.[C2] {iii}

2.4 Sharing Best Practice and Lessons Learned [C3]

2.4.1 Parent expertise – EA1’s parent organisations have considerable expertise in the offshore wind sector(Annex 2A, 2B) and wider electricity sector. This experience is already being shared with EA1, for example:

The contract strategy in relation to WTG supply and installation and in relation to Foundation Design,Supply and Installation as multi-contracts has been influenced by lessons learned on SPR’s Wikingerproject which adopted a similar contracting strategy. [C3] {ii}

The approach to the array cable supply and installation packages has been influenced by lessons learnedfrom SPR’s WoDS and Wikinger projects. [C3] {ii}

More generally, helping determine the appropriate risk allocation between EA1 and contractors toreduce costs. [C3] {ii}

2.4.2 Sharing lessons learned with supply chain – We are sharing lessons learned from previous SPR andVattenfall offshore projects with EA1’s chosen suppliers, seeking their learning in return, to enabledevelopment of more vertically and horizontally integrated approach to delivery. For example:

Sharing lessons learned as part of the optimisation work streams that are already underway withshortlisted WTG suppliers (discussed further in 3.3.2).

Reviewing the experience of EA1’s shortlisted grid transmission package suppliers to consider learningfrom HVDC projects deployed to date in the German North Sea.

Engaging with EA1’s chosen foundation designer to standardise and simplifying aspects of the design forfabrication and installation using learning from the Wikinger and Ormonde projects. [C3,I6,S5] {ii, iii}

2.4.3 Once suppliers are chosen, EA1 will expand this process to ensure engagement across packages, exploringinterfaces at an early stage, both with respect to opportunities for shared benefit as well as with respect toreducing risk. [C3, I6, S5] {ii, iii}

2.4.4 Participation in industry forums – EA1, via its parent companies, has a leading presence on the followingforums:

the OWPB;

the RenewableUK Board;

ORE Catapult Industrial Advisory Group;

Strathclyde University’s Technology Innovation Centre (TIC);

the EEGR; and

Offshore Wind Accelerator (OWA) Steering Committee.

SPR, Vattenfall and EA1 use these forums to raise awareness of opportunities with members of the suppliercommunity as well as share best practice and lessons learned. [C3, C4] {ii}

2.4.5 EA1 and its parent companies also actively participate in numerous events and activities designed topromote best practice, such as: [C3] {ii,iii}

OWPB developer days

Offshore Transmission Standardisation workstream

Leading an industry wide OWPB O&M workstream

2.4.6 Finally, to further share best practice, EA1 will enter discussions with other East of EnglandDevelopers/Operators with a view to forming an “East of England Operator group” which would offer ameans for developing an efficient pipeline of local suppliers during project construction and operation.[C3,C1,C4] {ii, iii}}

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2.5 Improving Awareness of Commercial Opportunities [C4]

2.5.1 Using conferences and industry events – EA1 has actively promoted its supply chain opportunity to potentialsuppliers through presenting at the following industry and stakeholder events: [C4] {i}

Renewable UK Offshore Wind conference, June 14, Debate - Offshore Wind in a Competitive Market,Glasgow, June 2014

EWEA Conference, Barcelona, March 2014 – Panellist, Industry leaders debate

Scottish Renewables Offshore Supply Chain Conference, Aberdeen, January 2014 – Supply ChainAlliances

South North Sea Conference 2014 Cost of Energy challenges – Offshore Wind

EWEA Global Offshore Wind Conference, ‘The challenge of competitiveness’ presentation and otherpanel events, Frankfurt, November 2013

Presentation of Iberdrola offshore projects – French trade commission, October 2013

Renewable UK Offshore Wind, June 13, Chairing and presenting at the Share Fair Event

UKTI Madrid, February 2013, “Iberdrola Projects in UK Offshore”

Jiangsu Development and Reform Commission Delegation, November 2012, “Offshore Wind Overview”

Infrastructure Journal Renewables Forum, March 2010 “Offshore Wind Supply Chain, A Developer’sPerspective”

Maritime Industry Conference, February 2010 “Offshore Wind Supply Chain”

2.5.2 Local supply chain events – EA1 participates at many supply chain events local to the project. Through theBoard of the EEEGR, EA1 supports their events programmes to bring together suppliers from the oil & gas,wind, bio-energy and nuclear sector to understand future project opportunities. EA1 will complement thisactivity by engaging further with other relevant bodies that represent the UK renewables, oil & gas,shipbuilding, ports sectors and regional and local industry bodies so that their members are aware of pre-qualification opportunities. [C1,C2,C4,C3,C5] {ii}

2.5.3 Share Fair events – A second share fair event (following the RUK share fair presentation In June 13, 2.5.1),this time organised by EA1, will take place in Norwich during October 2014. At the event, EA1 will set out itssupply chain opportunities and bring together a selection of potential tier 1 suppliers and connect them withtier 2 and below suppliers. This will enable local and UK suppliers to understand how to pre-qualify with theirpotential future customers and EA1 will re-enforce the importance of local and UK content to its tier 1suppliers. This event will be followed by a series of other events as the tender processes for each of themajor packages develop. Both SPR and Vattenfall will use experience in delivering similar events from theironshore wind developments to inform the format of the session. [C1,C2,C3,C4,C5] {ii}

2.5.4 Information Packs – EA1 will also provide basic information packs to interested suppliers in October 2014,incorporating a link to, “A Guide to an Offshore Windfarm”, published on behalf of The Crown Estate andheadlines of generic requirements for different areas of supply to enable suppliers to establish theirsuitability to supply, both from a technical and commercial perspective. [C1,C4] {ii}

2.5.5 Use of EA1 Website – EA1 operates a project-specific website (www.eastangliawind.com) to support itsmarket engagement activities. This is being used for the following purposes:

Supplier interest registration: The website allows suppliers to register their interest with EA1. By June2014 a total of 183 prospective suppliers had registered, of which 148 (81%) are based in the UK.Although EA1 will not contract with many of these companies directly, it is committed to sharing thisinformation with shortlisted tier 1 suppliers at an appropriate stage to enable their involvement.EA1 will issue a communication to the registered suppliers in September 2014 providing an update onthe status of the project and also setting out EA1’s intention to provide their details to the shortlistedsuppliers for key packages at a suitable time for consideration.The registered suppliers will also be invited to the forthcoming share fair events being planned forlater this year as discussed in 2.5.3. [C1,C2,C4,C5] {ii}

Providing information about the projects procurement strategy & status: The website is beingupdated to explain EA1’s contracting strategy, procurement process, pre-qualification opportunitiesand timeline to help suppliers to engage at the right time at the right level. This will show theprocurement status of tier 1 packages and a list of tenderers and shortlisted parties (where

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commercially appropriate). EA1 will make it a condition that tier 1 suppliers provide contact details fortheir sub suppliers so that potential sub suppliers can make contact with the companies they wouldcontract with. [C1,C2,C4,C5]{ii, iii}

2.5.6 Supporting Government bodies – EA1 will continue to support BIS/UKTI/Scottish Enterprise to promoteopportunities for investment in the UK to satisfy the growing offshore wind market. EA1 has participated at anumber of overseas events to promote the opportunity and assists wherever possible in connecting overseasbusiness with potential UK partners. This is supported by the actions EA1 is taking in the foundations marketto connect supply chain partners (see 2.14.2). [C2] {ii, iii}

2.6 Encouraging Competitive Procurement Processes [C5]

2.6.1 Structured and open procurement processes – The dominant way that EA1 will drive competition is throughits structured and open procurement process, described below (2.6.3). Through this, EA1 will broaden andincrease the robustness of the supply chain and thereby, manage costs, minimise long-term supply chainrisk, and help establish a sustainable industry, providing significant national benefit. [C1,C2,C3,C4,C5] {ii, iii}

2.6.2 For each of the main packages we run a structured procurement process, facilitated by EA1’s SupplierRelationship Management tool, driven by the objectives of maximising competition, both short-and long-term, and minimising shared risk. The attached project programme (Annex 7) shows how use of theprocurement process fits with DECC timescales to deliver the EA1 Project in an efficient manner. Alsoprovided in Annex 10 [redacted] is information on future financial commitments which complement theproject programme. [C4,C5] {ii}

2.6.3 EA1’s procurement process follows 5 key stages set out below:

1. Market engagement & strategy determination2. Pre - qualification3. Long list – formal tender launch4. Short list5. Supplier award

Brief comments on each phase are set out below:

2.6.4 Market engagement & strategy determination - Thorough consideration is given to identify existing andpotential suppliers in the market to inform the procurement strategy for each product and identify thewidest pool of suppliers to compete in the tender process. EA1 has a strong track record of engaging themarket to ensure that new entrants have the opportunity to participate in the procurement process (asindicated in 2.2.2). The key considerations to identify potential suppliers include: [C5] {ii}

SPR and Vattenfall’s experience on other offshore wind projects

Existing supplier contacts

Desktop research

Attendance at industry and stakeholder events

Supplier portal registrations

The key outputs from the market engagement process are the agreed procurement strategy for the productand a list of suppliers to include in the next stage – Pre Qualification.

2.6.5 Pre-Qualification Phase – The pre-qualification phase allows the project to assess the capability of eachsupplier to determine the most credible parties to engage in the formal tender process. Pre-qualification isenabled by the supplier responding to a pre-qualification questionnaire (PQQ) which sets out varioustechnical, health and safety and commercial enquiries. For development contracts placed to date EA1 hasenquired of the UK content of each supplier’s submission and considered this element as part of the PQQassessment criteria. We are also giving assessment consideration to the supplier offerings in terms of UKcontent, competition, innovation and skills as part of the evaluation process for major construction packagesas described in 2.8.1. [C5] {ii, iii}

2.6.6 Long list & Short list – Following PQQ assessment the most credible potential suppliers will be included on along list to participate in the formal tender process and be issued an Invitation to tender (ITT). The ITT setsout the specific scope of works and terms and conditions that a supplier offer is requested for. Following

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evaluation of supplier offer responses EA1 will often reduce the supplier field to a short list to allow for abest and final offer request for further negotiation ahead of determining the winning supplier. [C5] {ii, iii}

2.6.7 Supplier selection criteria – EA1’s supplier selection process entails the assessment of the supplier’s offeragainst criteria which includes an evaluation of health and safety, commercial and technical compliance. Thesame criteria are used for every supplier involved in the tender. [C1,C5]{ii}

2.7 Increasing UK Content

2.7.1 UK Content target – As noted in paragraph 2.1.1, EA1 has set a target of 50% UK content for the EA1 Project,with this target increasing to 55% & 60% for the future projects in the EA Zone. EA1 will collaborate closelywith its chosen suppliers as described in 2.11 to 2.19 below to achieve these targets.

2.7.2 Continuous Assessment of UK Content - An indication of the UK content related to each package over thelife of the windfarm is set out in Annex 2D. Based on EA1’s projection of supply chain choices today thisshows a lower and upper UK content range of 40% to 52% of UK content over the life of the EA1 Project andsupports delivery of EA1’s 50% lifetime target. These projections are made using the methodology that islikely to be approved by the OWIC. [C1,C2,C3,C4,C5,I3] {ii, iii}

2.7.3 Contractual enforcement of UK Content Methodology – Built in to all EA1’s tendering will be therequirement for suppliers to estimate their UK content in line with 2.7.2, and to cascade this requirementdown their supply chain as appropriate. This means that at Final Investment Decision (FID) EA1 will have afull picture of UK content for the EA1 Project and progress against the 50% target. EA1’s contracts will alsorequire that suppliers report UK content upon request. This will further drive a broadening of the UK supplychain and materially affect barriers to entry. [C1,C2] {ii, iii}

2.8 Reinforcing Key Principles of Competitive Criterion in the Supply Chain

2.8.1 Provision of Supply Chain Plans from key suppliers – Once a shortlist of potential suppliers is established,EA1 requests supply chain plans from each supplier demonstrating how they will deliver competition,innovation, skills and UK economic benefit. Tier 1 suppliers are then requested to do the same to any majortier 2 suppliers where opportunities exist in turn to drive changes in behaviour that would be in line with UKGovernment intent. EA1 has started to see how these requests drive communication and focus right throughthe supply chain. [C1,C2,C3,C4,C5,I1,I2,I3,I4,I5,I6,S1,S2,S3,S4,S5] {ii}

2.8.2 Contractual recording of Supply Chain Plans in MOUs – EA1 has already received Supply Chain Plans frompotential tier 1 suppliers and has entered into MOUs (see Annex 8 [redacted]) with these parties to makeclear its commitment to delivery of these plans. All tier 1 suppliers will need to present such a plan in theirfinal tender submission and EA1’s final selection of bidder will be influenced by their response. [C1,C5] {ii, iii}

2.8.3 Continued follow up on Supply Chain Plans – After selection, EA1 will continue to provide resource andchallenge to help its tier 1 suppliers maximise the benefit of their supply chain plans presented. EA1 will dothis by dedicating resource and establishing evaluation milestones to help monitor and review the deliveryof these plans with the chosen suppliers. [C1,C2,C3,C4,C5,I1,I2,I3,I4,I5,I6,S1,S2,S3,S4,S5] {ii, iii}

2.9 Impact

2.9.1 The actions described above address all of the criteria relating to competition, as outlined in Annex 1. EA1 isusing opportunities provided by such a large project at between 500MW - 600MW utilising the mostinnovative supply chain choices (such as HVDC, higher voltage array cables and next generation WTGs) toimplement actions that either would not be possible or would have a lessor impact on a smaller project.

2.9.2 The key impacts of the EA1 Project are:

New investment in UK manufacturing facilities for turbine components and component volumes to helpfoundation and cable suppliers move closer to realise their investment plans, with the extent of thisdependent on suppliers chosen and decisions taken on other projects. {ii, iii}]

Provision of a further offshore test site, dependent on any further external approvals required. This canbe used to test a range of windfarm components, including turbines and foundations. {iii}

Very significant supply opportunities due to the scale of the project and the technology choices made,with increased accessibility to new suppliers through more open procurement practices. {ii, iii}

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Improved awareness of supply opportunities throughout the supply chain and increased clarity on howto access these. {ii, iii}

Improved sharing of best practice and lessons learned, both internally, vertically within EA1’s supplychain and horizontally across the industry. {ii, iii}

2.9.3 EA1 has considered the impact of EA1 on the wider industry in detail for six different types of project, asdescribed in Annex 6, where the impact of 18 specific groups of actions are considered. Headlines of impactson these six types of project are:

1. Other EA Zone windfarms: The EA1 Project has the potential to have a very significant effect on these,due to synergies in geography, technology need and ownership. All of the supply chain development,good practice and learning can benefit future projects as long as continuity of sequential development(and hence staff) can be preserved. For example learning obtained from foundation design andinstallation as well as transmission infrastructure will be highly relevant to future EA zone projects.

2. Other offshore windfarms owned by SPR/Vattenfall: Much of the supply chain development, goodpractice and learning can benefit the parent company future projects where confidentiality andsynergies in project physical parameters allow.

3. Offshore windfarms owned by others: In terms of development of a sustainable, competitive supplychain, impact is probably greater than any other single project planned to be installed in UK watersbefore the end of 2020, due to its scale and site characteristics. Many of the benefits of good practiceand learning are also applicable and will spread through dissemination via industry collaborations suchas RenewableUK and OWPB.

4. Wave and tidal projects owned by SPR/Vattenfall: Both organisations have interests in these sectors,giving further opportunity for knock-on benefit. Some supply chain relationships and learning will benefitand much of the purchasing good practice is directly relevant.

5. Wave and tidal projects owned by others: Some benefits remain in specific areas. Benefits will beincreased if Government applies some of its offshore wind supply chain measures to the sector.

6. The wider low carbon generation sector: Benefits beyond the marine renewables sector, in terms ofincreased confidence, sustainability and best practice. If supply chain plans and a focus on UK content isrolled out further, then the benefits of the EA1 Project will increase, especially in the East of England viathe vibrant support sector in the region, for example EEEGR.

2.9.4 Where additional specific impacts are recognised, headlines are described in the sections below relating toeach contracting element (2.10 to 2.20).

2.10 Contracting strategy

2.10.1 Key to understanding EA1’s approach to competition (and also innovation and skills development) is tounderstand its contracting strategy, which is based on the following packages:

Multiple small packages in the project development phase;

Turbine Supply, Installation, Commissioning and 5 years operation;

Foundation Design;

Foundation Fabrication;

Foundation Installation;

Array Cable Supply;

Array Cable Installation;

Transmission EPCI;

Ports and logistics; and eventually

Out-of-warranty operation.

2.11 Project development

2.11.1 Importance of UK for parent organisations offshore businesses – Both SPR and Vattenfall have relocatedtheir UK offshore teams to London to aid the development of the EA zone. Iberdrola, SPR’s parentorganisation, has also chosen to establish its worldwide offshore business in the UK. This focus on projectsbeing delivered from the UK has created an environment where learning can be shared across Europeanprojects and has resulted in over 225 people being employed full time in the UK. Since 2010, the twobusinesses have also committed to a 10 year lease on their central London offices. This jobs growth and

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building lease demonstrates SPR and Vattenfall’s commitment to delivering projects from the UK, usingRound 3 as a platform. However, it is also important to recognise the wider additional benefits to the UKeconomy of locating the development teams in the UK – including opening up opportunities to the local UKsupplier community. [C3,C2,C5] {ii, iii}

2.11.2 High proportion of UK development expenditure – The EA1 Project has planning consent and is at anadvanced stage of development. To date £94M has been committed to developing the entire EA Zone ofwhich £64M has been committed on the EA1 Project. Much of the expenditure on the EA1 Project has beenincurred on the delivery of environmental and technical site investigation studies. The largest order placedto date was incurred with, UK company, the Wood Group for the provision and installation of two met masts(£17M). The EA1 Project is now at the detailed engineering phase and has just contracted with Fugro GeoConsulting to complete a Geotechnical study (£13M) to enable further site definition and commencedetailed engineering for certain key packages. [C1] {ii}

2.11.3 From EA1’s in-house monitoring, it is estimated that over 95% of spend (in-house and external) has beenwith UK registered companies. [C1,C2] {ii}

2.11.4 Use of competition and promotion of local suppliers in development phase – Each of the major contractsplaced during the development phase followed EA1’s open and structured procurement process wherebyEA1 has opened up the supply opportunity to as many credible bidders as possible. EA1 has particularlypromoted supply from UK companies by inviting many to participate in EA1’s tender processes andallocating some weighting towards UK content as part of EA1’s tender evaluation procedure. [C1,C2,C4,C5]{ii}

2.12 Turbine supply & installation

2.12.1 No framework agreement restrictions: EA1 does not have any framework agreements in place with anyWTG supplier and has an open approach to considering alternative supplier solutions this promotescompetition and innovation. Key learning from past experience on the parent companies’ other offshorewindfarms influenced the decision to combine the wind turbine supply and installation packages as a jointscope of works.[C1,C2,C3,C4,C5]

2.12.2 Open competitive tender process: Twelve WTG suppliers were contacted during market engagement, seven(58%) of which were either new or less established offshore wind suppliers. The process progressed toinclude six suppliers in the formal tender process and now three supplier models remain in the shortlistwhich was determined in July 2014. [C1,C4,C5] {ii}

2.12.3 None of the three turbines has yet been installed in any quantity offshore, so EA1’s use of any of theseturbines will accelerate their journey to large-scale commercial use. This helps address the key turbine-related concern of the timing of this journey raised in The Crown Estate’s Offshore Wind: A 2013 supply chainhealth check. [C1,C2,I2,I4] {ii, iii}

2.12.4 Turbine supplier supply chain plan commitments: Each shortlisted supplier has provided a supply chain plan(as described in 2.8) offering a broadening of their supply chain and each has entered an MOU with EA1 asevidence of their commitment to deliver on these plans (Annex 8) [redacted].[C1,C2,C3,C4,C5,I1,I2,I3,I4,I5,I6,S1,S2,S3,S4,S5] {ii, iii}

In-warranty operation

2.12.5 As indicated in 2.3.3, the selected WTG supplier(s) will perform in warranty operations and servicingactivities during the five year warranty period. EA1 will work closely with the WTG OEM during this period todevelop the skills and knowledge required to either perform in house or sub contract these services toanother third party following the expiry of this term. The impact of this strategy will be to create theconditions for competition development in the area of post warranty WTG maintenance which we expectwill grow and lead to cost reduction in the longer term. [C1,C2,C3,C4,C5]{ii}

2.12.6 During the initial warranty period EA1 will engage with other offshore wind developers utilising or likely toutilise ports and harbours around the East Anglia area to explore the possibility of collaborating together touse these facilities and services with a view to generating synergies from this action. [C4,I3] {ii, iii}

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2.12.7 Impact: The actions described above address all of the criteria relating to competition, as outlined in Annex1. Generic impacts are discussed in Section 2.9. Key package-specific impacts at a project level are:[C1,C2,C3,C4,C5] {ii}

New investment in one or more UK manufacturing facilities, by the turbine manufacturer or 3rd partysupplier. This is dependent on suppliers chosen and also decisions taken on other projects.

Provision of a further offshore turbine, foundation and other component or operation test site.

Turbines not yet installed in commercial projects being used, independent of which supplier chosen.

Further localisation of supply.

2.12.8 All of the above impacts have knock-on impacts at a wider level, including projects beyond the EA1 Projectand in sectors beyond offshore wind, as discussed further in Annex 6. {iii}

Turbine installation

2.12.9 Installation wrapped following lessons learned: As part of the scope of works each WTG supplier wasrequested to provide a transport and installation offer. This request was influenced by the recent decisionto combine these packages on SPR’s Wikinger project with the developer advantages including a reductionin interfaces to manage and the allocation of this scope lying with the party best placed to manage theinstallation risk. This part of the WTG suppliers’ scope is fully integrated with the WTG supply negotiationsoutlined above. [C3] {ii}

2.12.10 Open market of installation suppliers considered: The shortlisted WTG suppliers have included as part oftheir tender responses installation proposals including 13 vessels and multiple port choices. EA1 will workwith the preferred WTG supplier to engage the pool of suitable vessel owners and port locations for thedelivery of the project. [C1,C2,C4,C5] {ii}

2.12.11 Collaboration to share knowledge & facilities: EA1 will discuss turbine installation specific lessons learnedfrom past offshore wind projects with the chosen supplier to ensure that the optimal execution plan for theEA1 Project is defined. EA1 is already having these discussions as part of the turbine package optimisationworkstream (3.3.2). Further comments on shared port facilities are noted in 2.19. [C1,C2,C3,C4,I3] {ii, iii}

2.12.12 Impact: The collective impact of the above activities on the wind turbine installation sector will be to drive:[C1,C2,C3,C4,C5] {ii, iii}

Competition in installation of very large turbines far from shore and in relatively deep water

Good practice with regard to lessons learned and vertical communication

Localisation of supply, where there are shared benefits to do so

2.13 Foundation Design

2.13.1 Previous jacket experience informing approach: Steel jacket foundations are the optimal solution for theproject's water depth and soil conditions. This decision was influenced by Vattenfall’s experience of jacketinstallation on the Ormonde Offshore Windfarm and SPR’s recent experience contracting this foundationsolution for its Wikinger project. In both such occasions new suppliers were introduced to this area of themarket (as described in 2.2).[C1, C2, C3, C5] {ii, iii}

2.13.2 EA1 owns the design which gives greater supplier options: EA1’s approach has been to ensure that it hasownership of the design specification produced. This strategy allows EA1 to promote the fabricationopportunity to a wider number of potential suppliers than had an existing concept design tailored to thefacilities of a smaller number of fabricators option been selected. [C1,C2,C4] {ii, iii}

2.13.3 Open and competitive tender process: Thirty seven suppliers were initially contacted during marketengagement the majority of which were new or less established suppliers in the offshore wind market. EA1is close to awarding a contract to the preferred foundation design supplier. [C1,C4,C5] {ii}

2.13.4 EA1 will challenge the contracted supplier to optimise the jacket solution to be deployed on the EA1 Projectensuring that particular consideration is given towards the prospect of standardising and simplifying aspectsof the design for fabrication. EA1 will also examine the concept of further integration of the WTG tower andfoundation as this is considered to be an area which could generate future cost savings. [C3,I2,I5] {ii, iii}

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2.13.5 Impact: It is expected that aspects of this design solution will also be of use to SPR and Vattenfall’s futurepipeline of offshore projects. Learnings from the EA1 Project should also result in foundation fabrication costsavings on the next EA Zone projects and SPR’s St Brieuc project.[C3,I6] {iii}

2.14 Foundation Fabrication

2.14.1 Fabrication lessons learned: Vattenfall and SPR’s experience in contracting and installing jacket foundationsresulted in lessons learned including the need to promote close collaboration between the chosenfoundation designer and the elected fabricator. Although the design of the foundation will have differences,this experience gives EA1 confidence to drive competition in this package. [C3, C5, I5] {ii}

2.14.2 Action taken to reduce barriers to entry: EA1 recognises some of the barriers to entry in this market(including having sufficient financial strength and serial production facilities) and the challenges in fosteringUK content in this area, that is why as part of its market engagement/PQQ activities EA1 has:

Brought together certain suppliers to explore partnering opportunities to strengthen their marketoffering and support necessary investments. These actions are intended to deliver long-term supplycapacity and cost of energy reduction. EA1’s activity is evidenced by the ‘Letters ofAcknowledgement’ EA1 has received from certain fabricators.

EA1 has included organisations not normally associated with offshore jacket fabrication as part ofits market engagement and PQQ process in an effort to highlight the opportunity and bring newentrants into the market [C1, C2, C4, C5] {ii, iii}

2.14.3 Broad market engagement and open tender process: EA1 made contact with 104 suppliers for this package,many with different industry backgrounds including oil & gas. Of the suppliers engaged 75 (72%) were eitherless established or new to offshore wind and included 12 new suppliers from the Far East. [C1, C2, C4, C5] {ii,iii}

2.14.4 Forty seven suppliers were subsequently issued a PQQ in June 2014, 21 (45%) of these suppliers are new tothe offshore wind industry. Ten of these suppliers were contacted for pile fabrication only.[C1, C5] {ii, iii}

2.14.5 Initiatives underway to increase competition and optimise design: As part of the PQQ process EA1 isexploring a number of initiatives to increase competition and UK benefit. which include: [C1, C2, C3, C4, C5,I3] {ii}

Multiple suppliers of foundations (up to two fabricators), to enable use of smaller or newer playerswhere the risk of using them for the whole project would be too great.

Separation of supply of main foundation structures and pin piles scope. Up to two suppliers are beingconsidered for pile supply only.

Providing foundation suppliers an additional option to put forward their own design solutions if theyconsider this could improve the foundation and deliver cost reduction.

Understanding the triggers to unlock investment in next-generation series manufacturing facilities usingtechnology from other sectors as a key means for reducing cost.

Provision of additional geophysical, geotechnical and metocean data if necessary to maximise quality ofdesign, thereby reducing lifetime cost.

Designs optimised in dialogue with a steel supplier and WTG supplier.

Challenge and support to fully explore the cost of energy benefits of semi-standardisation of designs tofacilitate lower cost manufacture and installation.

2.14.6 In line with EA1’s strategy for each major package it has requested supply chain plans from certain suppliersinvolved in the tender process (as described in 2.8), provided in Annex 8. The highlights of each plan aredescribed below. [redacted] [C1, C2, C3, C4, C5, I1, I1, I2, I3, I4, I5, I6, S1, S2, S3, S4, S5] {ii}

2.14.7 An order for the EA1 Project foundation fabrication would: [C1,C4,C5,I2,I5] {ii, iii}

2.14.8 Impact: The actions described above address all of the criteria relating to competition, as outlined in Annex1. Key package-specific impacts at a project level are: [C1,C2,C3,C4,C5] {ii, iii}

New investment in one or more UK manufacturing facilities, including via partnering, dependent onsuppliers chosen and also decisions taken on other projects.

Multiple suppliers enabling increased competition and opportunity for more suppliers to deliver.

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Significant opportunity for localisation of supply.

2.14.9 All of the above impacts have knock-on impacts at a wider level, including projects beyond the EA1 Projectand in sectors beyond offshore wind, as discussed further in Annex 6. {iii}

2.15 Foundation Installation

2.15.1 Leadership installing jackets in scale: The EA1 Project will be one of the largest offshore wind project everinstalled using jacket foundations and presents a significant learning opportunity for EA1, the parentcompanies and the installation contractor. EA1 is taking an open approach to the procurement of aninstallation contractor and is considering a variety of alternative vessels for this scope of works including thelatest heavy lift floating vessels and next generation jack up vessels. [I4] {ii, iii}

2.15.2 Open and competitive tender process: Fifty seven potential suppliers were contacted during marketengagement, 29 (51%) of which were new suppliers to the offshore wind market. The PQQ for this packagewas sent to 24 suppliers during June 2014. Following EA1’s evaluation of these responses the formal tenderprocess will be launched in Q4 2014 with the preferred supplier appointed in Q4 2015. [C1,C2,C4,C5] {ii}

2.15.3 Optimisation planning: As part of the tender process, EA1 will collaborate with its shortlisted installationsuppliers to design the most efficient and effective logistics and execution options for the EA1 Project whichutilise the preferred UK ports (see 2.19) [C3,I3] {ii, iii}

2.15.4 Impact: We expect that the experience gained by both the project and supplier installing the EA1 Projectfoundations will prove highly transferable and valuable for future jacket installation offshore. This isexpected to lead to a reduction in installation costs for future offshore projects.[C3,I4, S4] {ii, iii}

2.16 Array Cable Supply

2.16.1 Innovative technology choice: EA1 intends to use latest technology 66 kV AC array cables, with associated66kV protection and switchgear. [C1,I2] {ii, iii}

2.16.2 Lessons learned: The project has discussed cable-specific lessons learned from other projects. Key learningfrom this included the interface management issues between cable supplier and installer, additionally; otherconsideration has been given to the adequacy of survey data which is provided to the chosen contractor.Later in the process, EA1 will share this learning with short-listed suppliers and seek their learning in return,to enable development of more vertically integrated approach to delivery which may also include shared useof EA1’s preferred construction port. [C3,I3,I6] {ii}

2.16.3 Wide market engagement: EA1 has contacted nine suppliers as part of its market engagement activities todetermine the capability to supply 66kV array cable to EA1. Of this field 3 suppliers (33%) were either lessestablished or new offshore wind suppliers including a supplier from Japan and one from China. The PQQ willbe issued to potential suppliers during Q4 2014 with the formal tender commencing in late 2014/early 2015.[C1,C2,C4,C5] {ii, iii}

2.16.4 As part of EA1’s tender process, particular attention is being given to Companies that have already madeinvestments in the UK market

2.16.5 Impact: The key package-specific impact at a project level is new investment in UK manufacturing facilities,dependent also on decisions taken on other projects. This also impacts projects beyond EA1 and in sectorsbeyond offshore wind, as discussed further in Annex 6. {iii}

2.17 Array cable Installation and Protection

2.17.1 EA1 is currently considering combining the array cable supply package with the array cable installationpackage. This decision is being influenced by the lessons learned by EA1’s parent companies on otheroffshore wind projects with specific consideration being given to the advantages of allocating delivery,installation and quality responsibility to a single party. [C3] {ii}

2.17.2 Approach designed to maximise competition: Despite the advantages outlined above of combining thispackage, EA1 is deliberately presenting these packages to the market separately at this time. It is consideredthat this approach allows a greater number of potential installation suppliers to participate in the tenderprocess than if only EPCI organisations had been engaged with from the start (managing both cable supplyand installation scopes of work). Such parties often have their own narrower preferences in terms of

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favoured installation partners and by adopting this strategy EA1 are promoting competition and providing awider pool of suppliers access to this opportunity [C1,C2,C3] {ii, iii}

2.17.3 Wide market engagement: Twenty six potential cable installation suppliers have been approached as part ofthe market engagement activity for this package. Of the 26 parties engaged, 17 (65%) are either lessestablished or new suppliers to the offshore wind industry. The formal tender will be launched in 2015 withpreferred supplier award taking place in Q1 2016. [C1,C4,C5] {ii}

2.17.4 To help ensure the most cost effective and efficient cable installation programme is derived EA1 willcollaborate closely with the successful cable installation supplier to share the lessons learned on projectssuch as WoDS and will seek to provide additional geophysical, geotechnical and metocean data to ensureEA1 is well placed to design the most effective execution plan. [C3] {ii}

2.17.5 Impact: The EA1 Project will be one of the first offshore windfarms to deploy 66kV array cable. Theexperience gained on the EA1 Project will benefit future projects electing to use 66kV technology whichrepresents a realisable cost reduction choice. [I2,I4] {ii, iii}

2.18 Offshore Transmission EPCI (“Grid Package”)

2.18.1 HVDC technology being considered: This package comprises the design, engineering, procurement,manufacturing, supply, delivery, construction, installation, testing and commissioning of all works associatedwith the Grid Transmission System. Comprising a single combined AC collector & HVDC Converter offshoresubstation platform and an onshore HVDC converter station with 320kv export cables connecting theconverter platforms.

2.18.2 If HVDC is selected, the EA1 project will be the first UK offshore windfarm to deploy this technology, so anycontracts will significantly further develop the supply base and drive competition relevant to the UK foroffshore HVDC substations and remove a barrier for the whole industry. [C1,C2,C5,I2,I4,I3,I5] {ii,iii).

2.18.3 Lessons learned: Before commencing a pre-qualification exercise, EA1 considered lessons learned fromprevious substation procurement. EA1 has also sought lessons learned from the shortlisted suppliers whohave been involved in some of the German HVDC projects to enable a more informed, efficient andintegrated approach to the EA1 Project. Such learning includes the need to give thorough consideration tofabrication impacts during the detailed design stage in order to avoid costly re-engineering and variations ata later stage. Experience also indicates that maximising the amount of onshore commissioning improvesoverall efficiency and can accelerate delivery of the offshore installation phase. [C3] {ii]

2.18.4 Several new entrants considered: Seven suppliers were contacted through the market engagement process,four (57%) of which were either new or less established offshore wind suppliers. One of these suppliers is ofChinese origin. Four suppliers progressed to the formal tender process. [C5] {ii}

2.18.5 Although EA1 will contract a full EPCI package, a pre-qualification process was used to facilitate theexploration of a number of measures to increase competition and UK benefit. Including challenging the costof energy benefits of semi-standardisation of electrical and mechanical interface to facilitate lower costmanufacture and improved spares position. [C1,C2,C4,C5,I2,I3,I5] {ii}

Sub-suppliers for HVDC transmission

2.18.6 Two potential suppliers have engaged with a significant local company that is capable of fabricating ACsubstations for the EA1 Project. If this supplier was awarded the contract over 200 direct jobs would becreated over a two year period. This is further evidence of EA1 encouraging its tier 1 supply chain tomaximise UK content and connect lower tier UK suppliers with a supply chain opportunity. EA1 has a supplychain plan from this potential sub supplier (Annex 8.11.2). [C1,C2,C3,C4,C5,I1,I2,I3,I4,I5,I6,S1,S2,S3,S4,S5] {ii,iii}

2.18.7 Impact: The actions described above address all of the criteria relating to competition, as outlined in Annex1. Generic impacts are discussed in Section 2.9. Key package-specific impacts at a project level are:

Investment in new manufacturing capability in electrical and mechanical areas.

Tier 1 suppliers committing to increased localisation of supply.

Addition of new jobs in a range of areas and securing existing jobs.

Competition in a key new area of supply for UK projects – first UK HVDC project. {ii}

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2.18.8 All of the above impacts have knock-on impacts at a wider level, including projects beyond EA1 and insectors beyond offshore wind, as discussed further in Annex 6. {iii}

2.19 Ports and Logistics

2.19.1 Collaborative approach to utilise ports: EA1 has run a detailed process to establish preferred port locationsfor construction and operation. EA1 will share the information gathered with shortlisted WTG, Foundation &Cable installation suppliers to develop a cohesive strategy for shared use of these ports, where possible,recognising that suppliers for some packages have responsibility for final selection of logistics arrangements.This creative, joined up approach will help break down barriers to investment and generate synergies[C1,C2,C4,I3] {ii, iii}

2.19.2 Impact: The actions described above address many of the criteria relating to competition, as outlined inAnnex 1. Generic impacts are discussed in Section 2.9. The key port-specific impact at a project level isincreased efficiency of using land facilities, with the prospect of securing new investment, dependent also ondecisions taken by others. This also impacts projects beyond EA1, as discussed further in Annex 6. {ii, iii}

2.20 Out-of-warranty operation

2.20.1 EA1 is preparing for post warranty operation now. This relates to care of turbines, foundations, array cables,transmission and other operational services, the most critical of which being ongoing operation, plannedmaintenance and unplanned service of the turbines. [C3] {ii}

2.20.2 Critical to driving competition in this area, is the availability of relevant service records, operational data andknow-how. With this, it is possible to establish viable in-house and 3rd party solutions to compete withconventional approaches led by the turbine-manufacturer. EA1 is seeking to establish as much access to dataand know-how as possible during the turbine contracting activities, Section 2.11.4. [C1,C2,I5] {ii, iii}

2.20.3 Impact: The actions described above could in time have a very significant impact on the industry, as itevolves lifetime care strategies in response to the joint challenges of cost of energy, quality andsustainability post warranty. This also impacts projects beyond EA1 and in sectors beyond offshore wind, asdiscussed further in Annex 6. [C1,C2,C3,C4,C5] {ii, iii}

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3 Innovation3.1 Overview

3.1.1 Innovation part of parent company ethos: Iberdrola is committed to innovation and was ranked as the 4thleading European utility to invest in R&D activities in 20121. Iberdrola will invest £372M (€450M2) during2012-2014 in R&D in emerging and sustainable technologies. As detailed in the Iberdrola Innovation Report2011-20133, Iberdrola’s R&D efforts are focused on seeking to optimise operating conditions, improvingsafety, reducing environmental impact and developing technologies to face the energy challenges of thefuture. This positive attitude to innovation is also present in SPR and EA1.

3.1.2 Ambitious targets: The EA Zone represents an opportunity to embrace innovation and deliver a costeffective project with acceptable levels of risk. With this in mind EA1 has set the following ambitious targets:

Reduce the Levelised Cost of Energy (LCOE) to £100/MWh by 2020, in line with recommendations of theOffshore Wind Cost Reduction Task Force report4. Recognising that although EA1 will achieve FID beforethis point, its activities will influence cost reduction to benefit future EA Zone and wider offshore windprojects.

Invest an average of £3.5M per year in R&D/innovation and investment in new technologies specificallyfor offshore wind

Tier 1 supplier investment of an average of 3% of annual offshore wind revenues on developing better,more cost effective solutions for the future

We believe the second and third targets above will result in a total expenditure of £50M on R&D andinnovation attributable to the project. [I1] {ii, iii}

3.1.3 LCOE is the dominant parameter assessed in measuring the value of innovative concepts and is the drivingforce behind much of EA1’s activity in this area. [I5] {ii, iii}

3.1.4 EA1’s R&D investment targets will help drive activity through the supply chain to achieve its LCOE goalthrough encouraging further innovation. EA1’s potential tier 1 suppliers’ commitment to innovation isalready evident in the MOUs that have been entered and supply chain plans received (Annex 8)[redacted].[I4] {ii, iii}.

3.1.5 The sections below set out the actions that are being taken or planned to address each of the key impactcriteria (as set out in Annex 1) at an industry wide and package specific level for each key component of thewindfarm. The impact on the supply chain and the wider impact across the low carbon electricity generationindustry is also indicated where possible. Where available website references for innovation projects andinitiatives are either included in the text or have been captured in Annex 2H.

3.2 R&D and Technological development [I1&I2]

Project development

3.2.1 Industry wide projects:

Grid integration: The TWENTIES project is a large EU collaborative R&D project to assist the integrationof renewables onto the grid. This project, encompassing 26 European partners, involves 6 large scaledemonstrations. Iberdrola is leading one of the demonstrations to prove that wind energy cancollaborate technically in grid integration by way of new voltage and active power control systems atwind turbine, windfarm and control area levels. This Iberdrola-led demonstration has already deliveredthe final development of control tools. The final outcomes of this project will be hugely beneficial toonshore/offshore wind generators and grid operators across the industry. [I1,I2,I5] {iii}

1The 2013 EU Industrial R&D Investment Scoreboard

2Foreign exchange rate used in plan - €1.21:£1. Source: Iberdrola Market & Prospectives

3Iberdrola Innovation Report 2011-2013 (http:// www.iberdrola.es/webibd/gc/prod/en/doc/innovacion_informe13.pdf)

4Offshore Wind Cost Reduction Task Force report, June 2012 – target based on the EA phase that achieves FID in 2020

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Floating LiDAR validation: SPR is currently developing a Floating LiDAR demonstration project at EA1where the aim is for 2 floating LiDAR technologies to be deployed and tested as part of the offshorewind industry’s drive to make floating LiDAR technology bankable, reducing reliance on costly offshoremet mast solutions. [I2,I5,I6] {ii,iii}

Wake modelling: SPR is supporting the wakes measurement campaign at Rødsand 2. This project willprovide future validation data to improve and validate wake models. [I5] {iii}

Bird monitoring: As a member of the Offshore Renewables Joint Industry Programme (ORJIP) industry-public collaboration focused on environmental monitoring, SPR is an active consortium member in theBird Collision project which will monitor bird behaviour for 2 years at Thanet offshore windfarm to helpunderstand this impact to inform more effective consenting submissions. [I5] {iii}

Sea condition monitoring: EA1 has deployed two innovative instrumentation buoys in the EA1 zone tomonitor sea conditions to inform its engineering activities and installation planning. Live data collectedfrom the wave buoys is shared publicly via the CEFAS website (Annex 2J weblink). This information willassist any parties interested in the oceanographic conditions in the South West North Sea for exampleother offshore wind, wave and tidal generation developers, and weather forecasters. Sharing thisinformation may allow others to save costs by reducing the need for similar devices to be deployed inthis region. EA1 is also using information gathered to support a Southampton University project tofurther understand scour at offshore windfarms.[I2,I6}{iii}

3.2.2 Package specific action:

More front end studies: During development, EA1 intentionally engaged early with suppliers and carriedout more studies than typical of the past, in order to enable better characterisation of and design forconditions. This approach enabled more informed decision making. EA1 is using this learning to informthe strategy to develop the next EA Zone projects. [I6] {ii}

Pioneering aerial survey: The EA1 Project is the first offshore windfarm to support the use of aerialdigital imagery for offshore ornithological and marine mammal surveys. This innovation provided amore robust evidence base for assessments whilst reducing health and safety risks by minimising the riskto personnel working offshore. This survey methodology is now standard practice in the UK and thesecompanies are now considered world leaders with the approach recently implemented in Germany,France and the USA. [I5] {iii}

Bird monitoring: EA1 is one of 12 developers, along with DECC, Marine Scotland and The Crown Estate,to contribute to a £2M project to deploy remote monitoring devices at an operational windfarm toinvestigate bird behaviour. This two year comprehensive study supports the deployment of innovativetechnology to address a key knowledge gap and is supported by UK Statutory authorities. [I5] {iii}

Disturbance Effects on the Harbour Porpoise Population in the North Sea (DEPONS): This project is aninnovative study with the aim of understanding the consequence of disturbance from offshore windrelated activities on harbour porpoises. EA1 is part funding this multinational collaborative study(managed by Aarhus University) to address a key knowledge gap which should help inform moreeffective consenting submissions. [I5] {iii}

WTG supply & installation

3.2.3 Industry wide action:

WTG Test sites: As noted in paragraph [2.3.2], SPR and Vattenfall already show leadership in the area offostering the development of next generation wind turbines and foundations etc. via SPR’s Baltic Sea,Wikinger Sud and Vattenfall’s EOWDC proposed test sites , EA1 also intends to use a number of positionsin the EA1 Project for demonstrating innovative new WTGs and foundation solutions, the first far fromshore offshore wind demonstration site for the UK relevant to future projects. EA1 has discussed thiswith the Crown Estate [C1,I4,I5,I6] {ii, iii}

Offshore Wind Drivetrain Innovation (OWDin) – SPR is a lead partner in this project to test multi-lifebearings for offshore wind gearboxes with potential to improve offshore wind reliability and reduceoperating costs. As part of this initiative an innovative wind turbine bearing management system forgearbox bearings will be deployed at SPR’s Barnesmore windfarm [I1,I2,I5] {ii, iii}

ORE Catapult SPARTA - SPR and Vattenfall are part of a group of 8 developers involved in the SPARTAproject being managed by The Crown Estate and ORE Catapult. This project involves developer

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collaboration by sharing operational windfarm data to support improvements in the availability,reliability and performance of offshore wind assets. SPR and Vattenfall are active contributors to theproject and SPR will be sharing operational data from its WoDS windfarm (once fully operational later) in2014. The impact of this project will be greater sharing of knowledge across the industry to improveoffshore asset management and reduce the cost of energy. [I2,I6,S5] {ii,iii}

3.2.4 Package specific action:

First significant deployment of the latest state of the art WTGs: Each of the turbines shortlisted by EA1has not been deployed offshore yet and each incorporates significant levels of technical innovation andshould reduce LCOE (compared to lower rated WTGs) by between 10% - 15%. Examples of innovationare summarised in Annex 2.[redacted] [I1,I2,I3,I4] {ii, iii}

Nacelle mounted LiDAR: A notable innovation by the shortlisted WTG suppliers is the prospect oftrialling nacelle mounted LiDARs to provide a more accurate measurement of the wind speed in front ofthe rotor which can be linked with the WTG controller to potentially reduce fatigue thrust loads whichcould result in a reduction in foundation costs.[I2] {ii, iii}

Foundation design, fabrication & installation

3.2.5 Industry wide actions

Monopile chalk deployment research: SPR is the lead project partner in establishing a collaboration withImperial College London and Geotechnical Consulting Group to develop new design procedures for theuse of monopiles and jackets in chalk and has been successfully awarded grant support from theTechnology Strategy Board’s (TSB) “Infrastructure for Offshore Renewables” call. Such new designstandards will be particularly beneficial for future offshore wind development in Northern Europe wherechalk is a common ground condition. [I2] {ii, iii}

Suction bucket foundation: SPR is supporting the first full scale demonstration of a suction bucket jacketfoundation to be installed in 2014. This foundation offers a potential cost saving alternative to jacket pileinstallation solutions and could be employed in future EA Zone projects. [I4] {ii, iii}

Pile soil analysis project: SPR is playing a leading role in a Pile Soil Analysis project through itsconnection with the OWA with the aim of improving design standards for XL monopiles to enable thissolution to be used in deeper water with larger turbines which has significant cost reduction potential.This project also offers the potential to improve jacket design standards. [I4,I6] {ii, iii}

3.2.6 Package specific actions

EA1 will foster innovation in the foundations package via the following: [I2,I4,I5,I6] {ii, iii}

Placing one of the largest ever orders for jacket foundations in the market with up to two suppliers, thiswill help support the investment plans of certain fabricators to increase capacity and purchase state ofthe art tooling equipment

Collaborating closely with the chosen fabricator(s) to investigate how the design can be optimised forfabrication & steel weight

Working with suppliers to introduce volume manufacturing techniques and methods to reduceproduction times, manufacturing efficiency, quality and reduce LCOE.

Using lessons learned from the Ormonde project to inform EA1’s approach to design standards andpromote a serial production ethos to fabrication

Maximising the opportunity within the tier 2 and 3 supply chain to standardise their offering for primaryand secondary steel material (pipes & tubes)

Challenging its installation provider to optimise the installation plan using the latest vessels andinstallation techniques

Array cable EPCI


OWA Cable Technical Working Group: SPR and Vattenfall are part of this work group focused on arraycable innovation. This project aims to qualify a number of 66kV cables so they are commercially availableby the end of 2015 which will be beneficial to projects such as EA1 amongst others [I1, I2] {ii, iii}

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ORE Catapult - SPR sits on ORE Catapult’s Industry Advisory Group providing direct input into itsstrategic direction and projects. SPR is an active contributor to ORE Catapult on projects in relation tothe standardised testing of 66kV cables, fabrication techniques for new innovative foundation designsand exploring blade fatigue in relation to the offshore environment. All of these activities have thepotential to reduce the cost of offshore wind. [I1,I2,I4] {ii, iii}

OWA Dynamic cable project – SPR is an active contributor to an OWA project to examine how a typicalstatic cable reacts to application in dynamic conditions (when subjected to wave and tidal motion).Dynamic cable applications include free hanging cables from existing foundation technology, which hasthe potential to reduce installation costs, or can be used to connect floating WTG or wave and tidalgeneration devices. The project will allow the industry to obtain greater awareness of cable performanceto optimise the technical specification for cables being purchased in the future (and avoid costly overengineering). This is especially relevant to aid the development of less mature generation technologiessuch as wave & tidal and floating WTGs. Floating WTG in particular have significant potential to reducecosts and make deeper water offshore wind projects viable.[I2,I4,I5,I6] {ii, iii}

3.2.8 Project specific actions

First to adopt new 66kV technology: EA1 is leading the offshore wind market with its choice of 66kVinter-array cable. This solution gives cost of energy advantages (compared to 33kV cables) particularly inreduced transmission infrastructure costs and reduced electrical losses. [I2] {ii, iii}

Increased early engagement: For both export and array cables, EA1 is being proactive to examine thespecification of cables to better define its requirements to aid design of a lower cost but higher integritysolution. EA1 is encouraging suppliers to develop and produce cables in the UK to create jobs andeconomic benefit.

Grid Transmission System EPCI


Potentially the first ever HVDC export platform in the UK sector: The EA1 Project may be the first UKoffshore wind project to use an HVDC connection which is currently its preferred transmission option. Asthe first of many, this is ground breaking and will encourage competition and innovation in the supplychain to meet the demands of this new solution. Based on SPRs involvement with the OWPB, EA1estimates that moving to an HVDC transmission platform and higher voltage array cables could reduceLCOE by 6%. [I2] {ii, iii}

Meshed transmission networks R&D: SPR is currently sponsoring a PhD student at the University ofStrathclyde’s Doctorate Training Centre for Wind Energy Systems to investigate the important issue ofmeshed international transmission networks of relevance to the EA1 Project. EA1 will continue toexplore annually with the centre areas in which academic students can continue to support thedevelopment of the EA1 Project. [I1,I2] {ii}

HVDC offshore platform joint industry academic cost reduction study: SPR is part of an industry-ledcollaboration with Babcock, Iberdrola Engineering and Construction (IEC) and the University ofStrathclyde, to identify and validate ways in which significant cost savings can be made for HVDCoffshore platforms. This project has been successfully awarded grant funding from the TSB’s“Infrastructure for Offshore Renewables” call and will provide direct benefits to the EA1 Project giventhe significant electrical infrastructure required. [I2] {ii, iii}

The BEST PATHS project (Beyond State of-the-art Technologies for Re-powering AC corridors and Multi-terminal HVDC systems). Iberdrola is a work package lead for an HVDC emulator proposed to be built inTrondheim, Norway as part of a £7.2M (€8.7M) sub project within BEST PATHS. This project will enablean increase of wind energy integration in offshore HVDC links, a key issue for the EA1 Project and futurefar from shore offshore windfarms. [I2,I5]{iii}

Power Networks Demonstration Centre (PNDC): SPR has been working with ScottishPower as part of itsrole in the PNDC venture to build a medium voltage demonstration centre to support second tiersuppliers, OEM’s and emerging technologies to test and evaluate systems in a full scale testenvironment, and also demonstrate high voltage and power systems at part scale. It is believed MVDCtechnology offers benefits to both offshore wind generators and grid operators alike. [I1, I2] {ii, iii}

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Network Innovation Allowance (NIA): SPR is actively working with SPEN to support the development ofNIA projects that impact on offshore transmission infrastructure, including a project looking at LowFrequency AC (LFAC) for offshore connections. LFAC has a potential to reduce the cost of offshoretransmission technology for projects beyond 150km from the onshore connection point by around 30-50%, as well as offering an alternative to HVDC bootstraps in the onshore transmission network. SPENwill demonstrate LFAC in 2015 which should advance commercialisation of this technology. [I5] {iii}

ORE Catapult – EA1 case study: Due to the limited deployment of HVDC solutions for offshore wind,further refinement can be done to optimise the architecture and key parameters of the transmissionsystem. ORE Catapult is seeking to explore this area and EA1 is keen to use the EA1 Project as anexample case. Even if (due to timing and commercial reasons), the EA1 Project is not in a position to fullyadopt the results, EA1 recognises the value of such an activity to future EA Zone projects and the widerindustry, as it explores ways to reduce cost of transmission, especially for far from shore projects.[I1,I2,I4] {ii, iii}

Marin-El project – Iberdrola’s Engineering and Construction division is designing a new self-installingoffshore substation concept with a view to accelerating installation and significantly reducing the costsof offshore wind projects. This is a £8.3M (€10M) project, supported by the Basque Government and ishighly relevant to future EA zone and other offshore wind projects. [I2,I4] {ii,iii}

3.2.10 Package specific action

EA1 project team activity: EA1 is actively looking at improvements in transmission technologies toreduce the future costs of offshore wind, including: [I2] {iii}

o Improved classic 50Hz AC systemso Optimised DC solutions, simplifying the technology and reducing the offshore footprint.o Actively investigating alternative technologies such as low frequency alternating current to

improve offshore transmission costs.o Engaging with a wide range of suppliers and emerging suppliers to understand the development

of transmission technologies from 2020 to 2030.

3.2.11 Shortlisted supplier innovation: The HVDC substation option offers significant opportunity forinnovation, both in the design but also in installation. The shortlisted suppliers each have significantR&D programmes running and, following award, there will be a process to manage a range ofinnovations to incorporate into the solution for the EA1 Project.

Grid optimisation: EA1 is considering sizing the transmission system to be more reflective of actualusage, as discussed in The Crown Estate’s Offshore Wind: Cost Reduction Pathways Study. This isbecause the full rating of the transmission system is rarely fully used, due to the lack of correlationbetween sufficient wind speeds for maximum generation and the availability of all turbines to generateat this time. This could be a more cost effective alternative to a full rated system. [I2] {ii, iii}

3.3 Innovative procurement or contracting practices [I3]

3.3.1 Tier 1 supplier commitment to competition, innovation, skills & UK benefit: A key requirement of EA1’stender process is the request for suppliers to prepare supply chain plans as noted at 2.8.1 which specificallyaddress their approach and future actions to further innovation in the industry. This is a new and innovativemeans to promote competition, innovation, skills and UK content and drive these commitments through thevarious supply chain tiers. Following supplier award EA1 will dedicate resource to ensure that the innovationcommitments made by its suppliers are delivered and will be tracked at appropriate milestones. [I3] {ii, iii}

3.3.2 WTG Optimisation work stream: EA1 has challenged its shortlisted WTG suppliers through a dedicatedoptimisation work stream to demonstrate how further innovation can be implemented through their WTGsupply and installation offers. This work has been structured by examining the following six key areas witheach supplier: [I1,I2,I3,I6] {ii}

Optimal windfarm layout

Wind turbine upgrade opportunities

Optimised O&M approach

Early revenue delivery

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Foundation design improvement

Optimised Installation & logistics execution plan

The selection of each of these areas has been informed by the learning of the EA1 project team from pastproject experience and these insights have been compared and shared with those of the supplier in thecourse of several collaborative workshops held already on the optimisation topic. The outputs of this workstream to date include a number of new innovative concepts that have been identified which may havesignificant benefit to the EA1 Project and aid future industry cost reduction. [I2,I4,I5,I6] {ii, iii}

3.3.3 To help deliver future LCOE reduction, EA1 will also consider how to incentivise the chosen WTG supplierfollowing award to deliver further LCOE benefits and include this in the final supply contract. [I5] {ii}

3.4 Innovative or new installation methods [I4]

3.4.1 Deep water mast deployment: The met mast designed for the EA1 Project includes a number of innovativefeatures including (i) the foundation, which at over 40m water depth, is one of the deepest water monopilesinstalled in the renewables industry to date, and (ii) the conical design employed which reduced weight andsaved costs. This learning will also benefit future projects including those in the EA Zone. [I2,I6] {ii, iii}

3.4.2 HVDC substation installation: A significant innovation opportunity is in the installation of the HVDCconverter platform which could weigh in the region of 10,000 tonnes and has very limited options in termsof installation vessels to perform the installation operation. EA1 intends to explore an innovative self-installing system, where the substation is floating and pulled to site by tug, before jacking it into position.Should EA1 adopt and manage to deliver this approach successfully, then it could be adopted also on HVACsubstations for deployment on future offshore wind projects. [I1,I2,I4,I5] {ii, iii}

3.4.3 State of the art installation vessels deployed: EA1 will make use of state of the art offshore installationvessels for the WTG, foundation and cable installation packages. The award of an EA1 Project order also hasthe potential to support new vessel orders to add capacity to the market. [I1,I4]{ii}

3.5 Wider innovation in offshore wind [I5]

3.5.1 Further details around the leading industry groups SPR are involved in include:

3.5.2 OWA – Managed by the Carbon Trust, the aim of the OWA programme is to reduce the costs of offshorewind by 10%. SPR has representation on the OWA Steering Committee and has representatives within thetechnical working groups which focus on each of the issues below:

Turbine foundation designs for 30-60m water depths

Access systems to transfer technicians and equipment onto turbines

Improving cable installation methods

Electrical and transmission systems, primarily HVDC

Improving the layout of large windfarms to reduce wake effects

O&M and condition monitoring.

The OWA’s focus is on reducing the cost of the UK’s Round 3 sites, SPR is actively participating in thissuccessful innovation programme in order to deliver cost reduction and bring innovative new technologiesand processes to the EA1 Project and the wider industry. [I1,I2,I3,I4,I5,I6] {ii, iii}

3.5.3 The University of Strathclyde’s Low Carbon and Energy Technology Innovation Centre (TIC) – SPR is afounding member of the TIC alongside SPEN, SSE and Technip. This industry/academic collaboration takesforward industry-led research projects in the areas of electrical networks, onshore/offshore wind assetmaintenance and offshore foundations with a focus on development and innovation. EA1’s efforts arefocused on seeking solutions to technical problems to optimise operating conditions, improvingaccessibility/operability whilst reducing the LCOE of offshore wind. [I1,I2,I4,I6] {ii, iii}

3.5.4 Offshore Renewables Institute (ORI) – recently established by the Universities of Dundee, Aberdeen andRobert Gordon, the ORI is pooling their academic skills and facilities to support the development of offshorerenewables in the UK. SPR is playing an important role in helping shape the ORI’s offering to the offshoreindustry in the UK to ensure it complements existing innovation activity underway. [I5] {iii}

3.6 Sharing of best practice or lessons learned [I6]

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3.6.1 Presence on leading innovation groups: Certain initiatives (in particular the OWA, ORE Catapult, ORJIP andTIC listed above provide an excellent platform to engage with other developers and suppliers to sharelessons learned and best practice to aid delivery of the LCOE reduction goals being undertaken by eachgroup. Additionally, SPR and Vattenfall’s role in the SPARTA project is a strong example of efforts alreadyunderway to share knowledge with other developers.(3.2.3) [I6] {ii, iii}

3.6.2 Learning transfer on key construction packages: As set out in section 2, SPR and Vattenfall are activelysharing learning from past experience with the EA1 project team and supplier community partly evidencedby the work underway through the turbine optimisation workstream, foundation design refinement andscrutiny of historic issues on substation procurement and installation. [I6] {ii}

3.7 Impact

3.7.1 The actions described above address all of the criteria relating to innovation, as outlined in Annex 1. EA1 isusing opportunities provided by such a large project, at 600MW and far from shore, in relatively deep water,with higher voltage array cables and HVDC connection to implement actions that either would not bepossible or would be less impactful on a smaller or more standard project.

3.7.2 The key impacts of the EA1 Project are: {ii, iii}

Strategic focus and financial commitment to innovation of up to £50M directly attributable to the EA1Project through outcome target setting and increased R&D budgets from us and key chosen suppliers.

Rapid acceleration of collaborative HVDC technology development advances in the next generation ofWTGs, foundation manufacture and installation, HVDC infrastructure and far-from shore operations,including associated verification and testing. Each with the potential to reduce LCOE.

Facilitate the use of innovative supply chain practices and sharing of best practice and lessons learned,these being an integral part of EA1’s procurement processes described in Section 2 and discussed furtherin relation to each package in Sections 2.11 to 2.19.

3.7.3 As offshore wind is such a significant element of the future low carbon electricity generating industry due toits scale, complexity and high requirements, the impacts described above are likely to significantly impactthe wider industry as a whole, where synergies exist, for example: [C1,I1,I2,I3,I4] {ii, iii}

Similar development of especially windfarm design, turbine control, jacket foundation manufacturingand 66kV array cable technology relevant to the EA1 Project. {ii, iii}

Provision of a further offshore test site, dependent on any further external approvals required. This canbe used to test a range of windfarm components, including turbines and foundations. {iii}

Continued strong representation in national and international collaborative R&D activities, shaping theagenda, empowering delivery through sharing real challenges and pulling technology through tocommercial use. {ii, iii}

EA1 has considered the impact of the EA1 Project on the wider industry in detail for six different types ofproject (see Annex 6), where the impact of 10 specific groups of actions are considered. Very strong benefitwill be realised to other EA Zone windfarms and other offshore windfarms owned by SPR/Vattenfall. Thesame applies in some areas (including HVDC) to offshore windfarms owned by others. The key follow onbenefit to the wider low carbon generation sector is recognised again to be in HVDC technology for massenergy transmission.

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4 Skills4.1 Overview

4.1.1 Target: EA1’s target is to ensure a fully skilled workforce and appropriately trained workforce of between1,500 – 3,000 people is available to deliver the EA1 Project safely and efficiently. EA1 is determined to dothis by preparing the local work force in East Anglia with the necessary skills required in order to leave alegacy of highly skilled and experienced people to support the delivery of the next eleven offshore windprojects in the EA Zone and benefit the wider low carbon generation industry. [S4] {ii, iii}

4.1.2 Consent commitment to invest in skills: During the Public Examination of the EA1 consent application, EA1set out its intent to invest in skills and deliver a skills strategy. [S3]

4.1.3 As part of this examination process a Skills Letter of Intent was issued by EA1 in July 2013. Duringexamination a requirement was added to the final EA1 Development Consent Order for a skills strategy to besubmitted and approved by local authorities and Suffolk County Council. In response to this EA1 hasdeveloped an Outline Skills Strategy (Annex 9). This outline strategy will be developed into a final skillsstrategy during 2015 and early 2016. The principles of the strategy will be delivered through a SkillsImplementation Plan which will come into effect in 2016. The main principles of the outline strategy are:[S1,S2,S3,S4,S5] {ii,iii}

To ensure the necessary balance of demand for, and supply of, professional and vocational skills tosupport the delivery of the EA1 Project and to leave a legacy;

To promote employment and re-skilling opportunities in the communities most closely associated withthe development of the EA1 Project;

To utilise existing parent company skills programmes where and when possible and appropriate; and

To make best use of existing local and national education and skills infrastructures and add value tothese where appropriate.

4.2 Assessment of the future skills required [S1]

4.2.1 EA1 will generate significant employment & Gross Value Added (GVA): An assessment of skills was includedin the Environmental Statement prepared for consenting purposes in 2012 which included a chapter on thesocio-economic impact of EA1. As part of this submission, an employment demand forecast was preparedwhich indicated the following FTE requirements at each stage of the project (including direct, indirect andinduced roles). This analysis was initially performed for a project of up to 1200MW in size. Using thismethodology the number of jobs projected for a project of 600MW project would equate to:

Construction 577 – 1,391 FTEs per year for 3 years

Operations 58 -84 FTEs per year for 25 years

Decommissioning 100 FTEs per year for 2 years

4.2.2 Using this methodology the net additional jobs would represent between £27M and £52M GVA per annumat a regional level, between £9M and £35M for net additional jobs elsewhere in the UK, and in total between£36M and £87M. Further detail around the types of role required at each stage are included in Annex 5.[S1,S2]

4.2.3 EA1 considers that the construction projections shown above, which were calculated in 2012, are likely to beexceeded based on more recent information obtained from the supply chain which indicates peakemployment of around 3,000 FTEs during construction (Annex 2F). EA1 has considered this information insetting its ambitious jobs target above (4.1.1). [S1,S2]

4.2.4 In addition to the job estimates above, the EA1 project team currently includes 80 FTEs employed tocomplete the development phase of the project.

4.3 Assessment of the gaps between now and the future requirements [S2]

4.3.1 During the early development of the EA Zone, EA1 assessed the general skills requirements for the project.The assessment concluded that more detailed skills analysis for the construction, execution and operationalphase of the project would need to be carried out but EA1 had the necessary experience and resource inplace to complete the development phase. The assessment also indicated that the occupational profile of

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East Anglia and the East of England offers great potential to provide a mix of skills relevant to the project dueto the legacy of experience from oil & gas exploration in the Southern North Sea. [S2,S3]

4.3.2 EA1 is currently updating its assessment of skills demand and supply to inform its Skills Implementation Plan.This work is being informed by engagement with the supply chain, local enterprise, commerce and skillsbodies. Although this work is incomplete, the early conclusions are: [S1,S2,S3,S4] {ii, iii}

In-house project team demand should be met by the deployment of other parent company personnelinto the EA1 Project team. The expected chronology of SPR’s offshore wind pipeline is favourable toallow the transfer of relevant staff from its other offshore projects to transition and bring their skills tothe EA1 Project at the right time. This approach also enables an effective means to transfer knowledgeand experience.

Collaboration with the supply chain, local educational institutions, adult retraining and national/localsupport bodies should continue to identify and address skills gaps.

Further skills development is likely to be necessary in the following areas:o National Vocational Qualification (NVQ) Level 2 & 3 offshore wind service and maintenance skillso Engineering (all disciplines)o Project Managemento Support disciplines (Health & Safety, Quality Assurance, Risk Management, etc.)

4.3.3 EA1 is being proactive in addressing these potential constraints through the actions and initiatives it, itsparent companies and suppliers are involved in as described below.

4.4 Skills Initiatives Underway & Completed [S3]

4.4.1 EA1s parents are significant UK employers and are active in developing skills across the energy industry:EA1’s parent companies employ over 30,000 people. In the UK, ScottishPower employs over 7,000 peopleacross the energy sector.

4.4.2 The parent companies play a leading role in the following initiatives to address the need for adequate skillsin the offshore wind and wider energy industry: [S2,S3,S4,S5] {ii, iii}

4.4.3 Engineering targeted skills ScottishPower has invested significantly to address the engineering skills gap inthe energy industry by implementing a number of programmes. Headline schemes include: STEM (Science,Technology, Engineering & Maths) events, online sector programmes and media, engineering andapprenticeship programmes. Further details can be found in Annex 2G. [S3] {ii, iii}

4.4.4 Graduate Recruitment Programmes - Both parent companies offer extensive graduate recruitmentprogrammes. ScottishPower runs a graduate programme, with a yearly intake of 32 and an apprenticeshipscheme with a yearly intake of 48, with 10% of the graduate intake working for SPR. This is complementedby a staff development programme open to all. [S3] {ii, iii}

4.4.5 Engineering Foundation Programme – Sponsoring engineering focused events via the ScottishPowerEngineering Foundation Programme to provide students with a route into an apprenticeship as well asfunding postgraduate scholarships relevant to the energy sector. [S3] {ii, iii}

4.4.6 Adult Retraining - ScottishPower has worked with the military resettlement organisation Career TransitionPartnership to provide taster days to ex service personnel and EA1, through its Board representation on theEEEGR, is supporting industry awareness events for military personnel thinking about pursuing a career inthe power industry via it’s ‘military in the Energy Industry’ initiative which supports transition training forthose wishing to move into the energy sector. [S3] {ii, iii}

4.4.7 Transferring Skills - Transferring skills from the parties’ wider portfolio of thermal generation, offshore &onshore windfarms to projects such as the EA1 Project. This is evident by the workshops held betweenonshore wind & generation asset managers to share best practice to inform the training needs of EA1 O&Mpersonnel. [S3] {ii, iii}

4.4.8 Renewables Training Network Group (RTN) - RTN is an independent group established to address anexpected shortage of skilled workers in the renewable energy sector. RTN aims to deliver training to 12,000new entrants by 2016 and develop the skills of 11,450 employees currently working in the renewablesindustry. SPR is an active advisor of RTN and helps influence the targeting of specific training initiatives toensure this meets the needs of industry. [S2,S3,S4] {ii, iii}

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4.4.9 Skills & Employment Strategy Group - ScottishPower is an active member of the Renewable UK’s Skills andEmployment Strategy Group whose mission is to ensure that a pool of skilled and experienced recruits forthe wind, wave and tidal industries will be available to meet the sectors’ current and future employmentneeds. ScottishPower has liaised with Professional Institutions such as the Institute of Mechanical Engineersand Higher Education representatives from Universities including Strathclyde and Goldsmiths as part of aworking group to forge closer industrial links with these bodies and the Renewables Industry. [S5] {ii, iii}

4.4.10 Renewable UK Skills Manifesto – ScottishPower put forward a number of recommendations to Governmentfor the wider benefit of the industry to drive forward the skills Agenda as part of this industry leading paper.[S5] {ii, iii}

4.4.11 Offshore Wind Programme Board – Skills Workstream - SPR is an active contributor to this workgroupwhich has been set up to focus on industry skill requirements needed for Round 3 offshore projects. [S5] {ii,iii}

4.4.12 Norstec Network – ScottishPower and Vattenfall are members of the Norstec network which brings togetherkey players in the offshore renewables sector. As part of its commitment to public engagement, Norstec haslaunched a new skills pilot – The Norstec Academy, focused on engaging and informing the next generationof offshore wind employees and creating a community of positive advocates and future champions.ScottishPower, Vattenfall and EA1 have all offered to host students. [S3,S5] {ii, iii}

4.4.13 Local schools & universities: EA1 has working relationships with University Campus Suffolk (UCS), Universityof East Anglia (UEA), Norfolk University Technical College (UTC), Lowestoft College, Great Yarmouth College,Norwich City College and Colchester Institute the East of England Energy Group (EEEGR) and its core Skills forEnergy Programme. Further details regarding the purpose of these various bodies are set out in Annex 2E.[S3,S4] {ii, iii}

4.4.14 Crown Estate collaboration: Working with The Crown Estate, EA1 has also carried out a Schools and CollegesEngagement Programme raising awareness in Norfolk, Suffolk and Essex of the employment opportunities inoffshore wind. East Point Academy; Pakefield High, Benjamin Britten and Denes High in Lowestoft; Chantryin Ipswich; and, Felixstowe Academy have all been visited. [S3] {ii, iii}

Supply Chain Initiatives

4.4.15 EA1’s supply chain is being encouraged to address skills requirements via its request for supply chain plans(2.8.1) which provide evidence of the steps suppliers are taking to invest in skills and training. From the plansreceived to date, suppliers intentions include Skills academies, Apprenticeships, Delegations workshops,Internships, Work Experience, Graduate Schemes, Collaborative Skills Development Initiatives, SkillRetention and Retraining Initiatives, National & local Training Schemes participation. [S1,S2,S3,S4,S5] {ii, iii}

4.4.16 More specifically:

For HVDC technology EA1’s shortlisted suppliers are supporting STEM initiatives. Two companies asmajor engineering employers and apprenticeship providers are engaged in leading industry bodies andacademic initiatives to address any future supply chain gaps. There is a particular opportunity to developHVDC skills to benefit future EA and other far from shore offshore windfarms. [S2,S3,S4] {ii, iii}

For installation activities, installing 66kV array cables, up to 85 jacket foundations and up to 8MW WTGsin 40-50m water depth little is demonstrated so far. EA1 has had initial discussions with UK basedcompanies about the different skills requirements due to these conditions. Both companies are involvedwith skills initiatives, offer apprenticeships and would work with EA1 if successful to identify gaps andaddress with adequate skills and training. The installation activities will result in valuable transferableskills being created to deliver future offshore windfarms. [S1,S2,S3,S4] {ii, iii}

4.4.17 Additionally a number of the suppliers have cited apprenticeship and NVQ training schemes that are alreadyin place and will be continued based on the opportunity that the EA1 Project and other Round 3 projectsoffer. [S3,S4] {ii, iii}

4.5 Skills Initiatives to be implemented [S4]

4.5.1 EA1 will work closely with its chosen suppliers, academic and enterprise bodies to ensure that adequateresource is planned and delivered to the project during the construction and the operations andmaintenance phases of the project. [S4] {ii, iii}

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4.5.2 Key to this will be the Skills Implementation Plan which will come into effect during 2016. Although notcomplete this plan includes the following proposals which EA1 would commit to: [S3,S4] {ii, iii}

4.5.3 Primary school level - Aged 8-11: The development of new online focused activities and engagements thatsupport a curriculum focus on STEM subjects. This work is designed to build on the EA1 sponsorship withArchant Newspapers of the ‘Maths challenge’ in Suffolk.

4.5.4 Secondary school level - Aged 11-16: The development of a generic learning offer themed around the EA1Project to be made freely available online and a complementary focused approach working with selectedschools.

4.5.5 Post 16 Apprenticeships – EA1 will work to encourage and support the growth of engineering andapprenticeships which are focused specifically on the requirements of the offshore wind industry. Suchapprenticeship provision includes the Advanced level Wind Turbine Installation and Commissioning and theAdvanced level Wind Turbine Operations and Maintenance. EA1 will commission delivery of relevantapprenticeship programmes from one or a small number of Further Education Colleges or Private TrainingProviders following a tendering programme. Whilst no employment guarantee would be made to individualapprentices, a ‘job pledge’ may be offered by EA1 and its supply chain.

4.5.6 Undergraduate and post-graduate – EA1 will build on its relationship with local higher education bodiesincluding the UEA, UCS (and its network of partner Colleges) and the University of Essex to promote focusedand collaborative engineering curriculum development in the future. This might include, undergraduatetraining opportunities for those successfully completing the level 3 Advanced level apprenticeship in thePower Industry.

4.5.7 EA1 will also look to build on the link between ScottishPower, SPR and Strathclyde University to assesswhere value from the current arrangements could be delivered in East Anglia. This might include: sponsoredaccess to the Strathclyde Energy MBA, a ‘year in industry’ programme and internship opportunities.Additionally, EA1 will also consider how to connect the local graduate population with opportunities toengage with the Iberdrola Fundacion Scholarship and the Vattenfall International Trainee Programme.

4.5.8 Adult retraining and reskilling – Continued collaboration with the EEEGR to support the adult retraininginitiatives underway as outlined in 4.4.6.

Supply Chain Initiatives

4.5.9 A 5 year plan for training and skills will be requested from EA1’s suppliers as part of the tendering process.This will be reviewed along with EA1’s own plans every 3 months at Project Board level with appropriaterecommendations and actions taken to safeguard and deliver project skills and training. [S2, S3, S4] {ii, iii}

4.5.10 Once the suppliers are selected EA1 will start a programme of project skills and training assessmentworkshops with key suppliers to discuss skills/training needs and share lessons learned. Regularworkshops/events will be set up to coordinate activities across the supply chain. [S2, S3, S4] {ii, iii}

4.6 Sharing best practice and lessons learned [S5]

4.6.1 Transferring skills to future projects - EA1 is developing up to eleven similar projects (in addition to the EA1Project) in the EA Zone in addition to the wider offshore wind pipeline of 3.2GW being developed by theparent companies. The EA1 Project will allow the transfer of valuable learning each of these future projects.This is especially pertinent in the case of the wider EA zone which has similar favourable physicalcharacteristics and the opportunity to repeat learning from the EA1 Project. [S4,S5] {ii, iii}

4.6.2 Health & Safety skills & knowledge transfer – EA1 via its parent organisations is an active contributor to thefollowing health and safety initiatives which share information and best practice for the wider benefit of theindustry which will result in safer working practices offshore and reduce accident numbers. [S5] {ii, iii}

RUK Offshore Renewable Energy Emergency Forum (OREEF) – OREEF coordinates emergencypreparedness for offshore wind accidents. Participants in OREEF include Government organisations,regulators, agencies, emergency services, industry and service providers. The main function of the groupis to communicate and share best practice in the area of offshore emergency response.

RUK Offshore Health and Safety Committee - This committee has been established to discuss the majorhealth and safety issues related to working in the offshore wind industry. A key output of this Group is

of 30

Health and Safety Guidelines which provide information & best practice on technical, legal and policyissues. SPR has been part of the process that created and reviewed these guidelines.

G9 – SPR is one of a Group of 9 offshore wind developers that established the G9 Offshore Wind Healthand Safety Association (G9) in 2010. The aim of the G9 is to create and deliver world class health andsafety performance across the offshore wind industry. G9 member companies have committedresources from their own company to actively lead the industry in finding solutions to the safetychallenges that offshore wind projects face. The G9 have produced three guidance documents: Workingat Height, Marine Operations and Lifting Operations. These are due for publication towards the end of2014.

4.7 Impact

4.7.1 The actions described above address all of the criteria relating to skills, as outlined in Annex 1. EA1 is usingopportunities provided by such a large project, at 600MW and close to other existing and planned projectsto implement actions that either would not be possible or would be less impactful on a smaller or morestandard project. {ii, iii}

4.7.2 The key skills impacts of the EA1 Project will been driven by a skills letter of intent, outline skills strategy andsubsequent delivery activities: {ii, iii}

A skilled workforce peaking at 1,500 – 3,000 people to deliver the EA1 Project, which have high potentialto become long term sustainable roles through delivery of future EA zone and other offshore windprojects over a 10 -15 year construction period.

Significantly accelerated relevant skills development activities in Norfolk, Suffolk and Essex through awide range of local service providers and regional and national skills initiatives from work in primaryschools through youth apprentices and graduate programmes to adult retraining.

Increased numbers of the workforce skilled in delivery of HVDC solutions which will benefit future farfrom shore offshore windfarms.

Increased local educational attainment particularly in the STEM subjects, impacting positively on localemployment, productivity and economic growth whether in offshore wind or not.

4.7.3 Again, EA1 has considered the impact of the EA1 Project on the wider industry in detail for six different typesof project, as described in Annex 6. Very strong benefit applies to other EA Zone windfarms and offshorewindfarms owned by others that are local to the EA Zone. Due to the mobile nature of much of theworkforce and transitory nature of construction work, benefits also transfer well to offshore windfarmslocated elsewhere and to some extent to the wave and tidal sectors and the wider low carbon generationsector. Engineering skills in HVDC technology are relevant well beyond the EA1 Project. {ii, iii}

ANNEX 1

Annex 1 List of Impact CriteriaIn DECC’s Supply Chain Plan Guidance Document, April 2014, it is suggested to set out how the project will deliveragainst the impact criteria below. For ease of assessment, where the plan addresses the criteria this has beenhighlighted, combined with a reference to the provision of related evidence where applicable.

Competition

[C1] Encourage broader supply chains by supporting new entrants to the sector

[C2] Identify and remove barriers to entry for new supply chain companies, where these are within the scope ofthe projects

[C3] Share best practice and lessons learned

[C4] Improve awareness of the commercial opportunities among both companies that currently supply to therelevant low carbon generation sector and those that have the capability to do so, but have not yet entered themarket or have not yet reached critical mass

[C5] Encourage competitive procurement processes and more open competition across the supply chain toensure that the widest pool of candidates are able to bid for, and win, contracts

Innovation

[I1] Research and development, including links to universities and any examples of testing and demonstration

[I2] Technological development

[I3] Innovative procurement or contracting practices- for example, allowing less established products orprocesses to win part of a contract or co-investments in the supply chain which will reduce or manage the allocationof risk in such a way that it supports new entrants or less established partners

[I4] Innovative or new installation methods

[I5] Any other practice that is justified as innovative by the project (and its supply chain) or that would boostinnovation in the sector- for example, in the build/installation process, the technology used or the way the project isoperated

[I6] Examples where the applicant has, or intends to, share best practice and lessons learned

Skills

[S1] An assessment of the future skills requirements at each stage of the project (design, construction- includingthe major supply components, and operation and maintenance of the life of the project)

[S2] An assessment of whether these skills are currently in place and what, if any, gaps there are

[S3] A set of actions that will provide investment in skills and training in order to meet the future needs of theproject- as estimated at each stage

[S4] Plans that the project intends to put in place to maintain and develop the skills necessary for the lifetime ofthe project

[S5] Examples where the applicant had, or intends to, share best practice and lessons learned

ANNEX 2

Annex 2 EvidenceA. Table 1: Windfarms owned by Vattenfall / SPR that are in operation or under construction

Windfarm Owner(s) Country Rating(MW)

Status Firstoperational[Anticipated]

Lely Vattenfall NL 2 Operating 1994

Irene Vorrink Vattenfall NL 16.6 Operating 1996

Utgrunden 1 Vattenfall SE 10.5 Operating 2001

Horns Rev 1 Vattenfall DK 160 Operating 2002

Yttre Stengrund Vattenfall SE 10 Operating 2002

Kentish Flats Vattenfall UK 90 Operating 2005

Egmond aan Zee Vattenfall NL 108 Operating 2007

Lillgrund Vattenfall SE 110.4 Operating 2007

Alpha Ventus EWE, E.ON,Vattenfall DE 60 Operating 2010

Ormonde Vattenfall UK 150 Operating 2011

Dan Tysk Vattenfall DE 288 Construction 2014

West of Duddon Sands SPR, DONG UK 389 Construction 2014

Kentish Flats 2 Vattenfall UK 49.5 Construction 2016

Total 1,444

B. Table 2: Windfarms owned by Vattenfall / SPR that are in development.

Windfarm Owner(s) Country Rating(MW)

Status

East Anglia ONE / 2nd

phaseSPR, Vattenfall UK 600 In development

East Anglia Three SPR, Vattenfall UK 1,200 In development

East Anglia (2,4,5,6) SPR, Vattenfall UK 4,800 In development

Strom-Nord Iberdrola DE 270 Consent applied

Nordpassage Vattenfall DE 400 Consent applied

Sandbank Vattenfall DE 288 Consent authorised

Sandbank Extension Vattenfall DE 240 Consent applied

Wikinger Nord Iberdrola DE 40 Consent applied

Wikinger Iberdrola DE 350 Consent applied

Wikinger Sud Iberdrola DE 65 Consent applied

Saint-Brieuc Iberdrola FR 500 In development

Kriegers Flak 2 Vattenfall SE 640 Consent authorised

Taggen Vattenfall SE 300 Consent authorised

Trolleboda Vattenfall SE 150 Consent authorised

Total 9,843

ANNEX 2

C. List of key mechanisms relevant to EA1 in developing its supply chain

Offshore Wind Investment Organisation, a cross-government team working to make inward investmenthappen, part of UKTI.

Regional Growth Fund which supports projects and programmes in England to create private sectoremployment between now and 2022. The payment of Regional Growth Fund money is spread between 2011and 2017 and is used to lever private sector investment to create economic growth and sustainableemployment. A range of offshore wind players have applied to access such support in the past.

GROW, a programme to support English businesses seeking to enter the offshore wind market, sponsored byBIS

Programmes broadly similar to GROW, but for Scotland, Northern Ireland and specific English regions, includingSupply Chain innovation for Offshore Renewable Energy which is a £2.5M programme, part financed by theEuropean Regional Development Fund, which supports SMEs in the East of England who are developinginnovative products or services in the area of offshore renewable energy.

Offshore Renewable Energy Catapult, once it establishes its SME support programme.

RenewableUK and Scottish Renewables’ generic support and networking opportunities.

English Centres for Offshore Renewable Engineering, especially the local Enterprise Zone at Great Yarmouthand Lowestoft.

New Anglia Local Enterprise Partnership which covers Norfolk & Suffolk.

EEEGR which is the industry association for energy in the East of England.

Scottish Enterprise and Scottish Development International

ANNEX 2

D. Anticipated UK content for EA1 Offshore Windfarm

EA1 has undertaken analysis of the likely UK content of the EA1 Project over the lifetime of the windfarm. The

purpose was to understand what actions EA1 should take in achieving its target of 50% lifetime UK content.

EA1 has applied the principles of the UK content methodology currently under consideration by the OWPC and

OWIC, in that it considers as far as possible the share of the expenditure captured by UK-based companies at each

tier of the supply chain.

Two scenarios have been developed:

the first, low scenario is that EA1 is passive in its procurement process; and

the second, high scenario, is where EA1 is active with its supply chain to maximise the participation of UK

companies.

In all the packages that EA1 intends to award, at least two suppliers are under currently consideration. In building

each scenario, EA1 has developed a low and high scenario for each possible supplier. It further considered the

probability of each supplier being successful in winning the contract and this probability was used to calculate a

weighted average for each package. The results of this analysis are shown in the table below.

Package or activity Lifetimeexpenditure

Low

(EA1 passive)

High

(EA1 active)

EA1 costs pre-FID 3% 80% 80%

EA1 internal costs from FID to workscompletion

3% 80% 90%

Turbine supply (excluding projectexecution)

16% 19% 29%

Turbine installation (including projectexecution)

3% 16% 26%

Foundation design 0% 50% 50%

Foundation and pile fabrication 8% 25% 53%

Foundation installation 4% 5% 10%

Array cable installation 2% 14% 28%

Array cable supply 1% 16% 26%

Grid transmission 23% 13% 29%

CAPEX 63% 22% 35%

Turbine O&M 21% 65% 75%

Other O&M 3% 75% 85%

Fixed OPEX: insurance, rent TNUoS 14% 79% 85%

OPEX 37% 71% 80%

Lifetime total 100% 40% 52%

UK content in lifetime expenditure is 40% and 52% for the low and high scenarios respectively. Opportunities to

increase the UK content in OPEX are primarily associated with the choice of major component manufacturer and it

is therefore in the CAPEX phase where procurement decisions to increase UK content need to be made.

Under the low scenario, UK content in CAPEX is 22%, rising to 35% in the high scenario. EA1 understands that the

average UK content in CAPEX for UK offshore windfarms built so far is about 20%. In EA1’s low scenario, there is

significantly higher UK content in turbine supply, reflecting announced or expected UK investments by turbine

ANNEX 2

manufacturers or their main suppliers. In contrast, UK content in the grid transmission is lower than many UK

offshore windfarms built so far because EA1 is uncertain whether the UK has the capability to manufacture the DC

converter station platform, which is a significant cost to the project.

EA1’s main opportunities for increasing UK content lie in turbine supply, grid transmission, and foundation and pile

fabrication. For turbines, the high UK content scenario could be achieved if EA1 bought turbines that were

assembled in the UK and used UK manufactured blades and towers.

For foundation and pile fabrication, much of the supply can be captured by UK suppliers, requiring only the import

of raw materials and tooling and, in theory, UK content in foundation and pile fabrication can approach 85%. In

EA1’s view, however, UK fabrication facilities may not have the annual capacity to supply the 85 or so units needed

by the EA1 Project. In the high scenario, the UK content is therefore 53%, reflecting supply from a combination of

UK and non-UK suppliers.

For grid transmission, the higher scenario can be achieved if engineering and project management is undertaken

mainly in the UK.

EA1 intends to keep track of progress using the above format, as decisions are made and more detailed information

is provided.

E. Table 9: Local skills support identified by EA1.

Local skills support Offering

Norfolk Suffolk Energy Alliance(NSEA)

Dedicated Inward Investment Director, James Gray, who provides a singlepoint of contact for potential investors including providing information onskills availability, training programmes through the local colleges and theindustry led Skills For Energy programmes.

Skills for Energy Partnership Supported by many of East Anglia’s major energy employers includingSeajacks, Perenco, Shell, ODE, EDF, SSE, The Crown Estates, 3Sun/Dawson,CLS and SLP. Successful pilot that leads programmes to attract people intothe industry including offshore wind and provide paths in for all skill levels.

Great Yarmouth and LowestoftCentre for Offshore RenewableEngineering

Partnerships between Central and Local Government and Local EconomicPartnership that ensure businesses looking to invest in manufacturing forthe renewables industry receive the most comprehensive support possible.

New Anglia Local EnterprisePartnership

Works with businesses and public sector partners, to help grow jobs inNorfolk and Suffolk. If formed and manages the Great Yarmouth andLowestoft Enterprise Zone, helps fund business growth and showcasesexamples of best business practice.

East of England Energy Group(EEEGR)

The industry association for energy in the East of England, representing over400 members across the supply chain.

Energy Production Innovation SkillsCentre

The EPIS Centre a new skills energy skills training centre based in GreatYarmouth that opened in July 2014. Initially the centre will provide trainingrooms as well as offices and meeting rooms for skills providers. A newwarehouse with industrial equipment to support the training is expected toopen early 2015.

Norfolk University TechnicalCollege (UTC),

Specialising in advanced engineering and energy

Nexus Engineering Nexus provides training and learning opportunities for learners of all ageswith a focus on the skills and knowledge required for the growing sectors ofEngineering and Advanced Manufacturing

Colchester Institute Colchester Institute is the largest vocational college serving North Essex andthe surrounding areas

ANNEX 2

F. Supply Chain Employment Opportunity

The table below sets out projected employment levels (FTE basis) during the construction phase of the EA1 Project.These estimates are based on information obtained from the supply chain in the course of EA1’s marketengagement activities.

Table: Projected employment totals based on supplier information

Package 2016 2017 2018 2019 2020 2021

Turbines 900 900

Foundations 100 1,000 1,000

Substations 250 400 400

Array Cable 50 50

Installation 850 850

O&M 70 70 70

Totals 100 2,200 3,200 1,320 70 70

The totals above exceed the peak total of around 1,400 FTEs calculated using the methodology used to informEA1’s consent submission. The difference is due to the different basis of calculation employed in the twoprojections. The socio economic study (used to inform the consent submission) used industry benchmarks based onMW of installed generation, compared to the direct estimates provided by the supply chain.

We recognise that the forecasting of such information is not precise, however, we are satisfied from theinformation presented to us that EA1’s employment target of between 1,500 – 3,000 jobs is achievable.

Further notes around the basis of the supplier employment projections received are set out below:

Wind Turbine Generators (WTG)

The employment opportunities created by the manufacturing of wind turbine generators for the EA1 Project couldbe up to 1000 FTE depending on the turbine solution. The manufacturing will be followed by offshore installationand commissioning during which up to a further 170 positions could be produced. Depending on the turbinesolution around 70 operations and maintenance personnel will be required for the lifetime of the assets, which iscurrently envisaged to be 25 years.

WTG Foundations

The employment opportunities created by the fabrication of WTG Foundations for the EA1 Project are estimated tobe approximately 1,000, depending on the manufacturing solution.

Electrical Substations

The employment opportunities created by the construction of the on and offshore electrical substations areunclear at present; however requirements are estimated to be approximately 400. These positions will be multidiscipline (as detailed in Annex 5) and will be located at the onshore substation location and in offshore platformfabrication yards.

Array Cable

The employment opportunities created by the manufacturing of array cable for the EA1 Project are estimated to beapproximately 50 depending on the manufacturing solution. Further analysis is required to understand the scope ofthe offshore installation however this will create further employment opportunity.

Foundations & WTG Installation

The employment opportunities created by the installation of the WTG Foundations and WTG’s for the EA1 Projectrange from 600 to 1200, depending on the installation solution.

Summary

ANNEX 2

Based on this latest analysis the employment opportunities created by the EA1 Project could be as much as 3,500during the on and offshore construction, followed by the operational phase which could see 70 positions createdfor up to 25 years.

G. Table 10: Skills Development Initiatives Underway

Initiative Target Input to date Intended Outcome orResult

Engineering your STEMFuture

Aimed at 15-17 yearolds

EA1 has provided key notespeakers & STEMAmbassadors

Illustrates the diversecareers available toengineers

STEM Taster Day Aimed at 14-16 yearolds

EA1 working in partnershipwith STEM.net

STEM taster days

Engineer Career Carousel Aimed at 14-16 yearolds

EA1 partners attend andprovide information onopportunities

Provides a briefintroduction toengineering roles withenergy industry

Grangemouth ScienceFestival


12 days of proactiveengagement with approx.2000 young people

Promote Maths andScience key subjects forthe Power Industry

Go4Set Programmes Aimed at all ages EA1 Partners sponsor theproject & provides supportover 10 weeks by supplyingSTEM ambassadors to assist.

Promote STEM for thePower Industry

Skills for work Aimed at 15-16 yearolds

Students are partnered with abusiness

Provide insight into theworking environment

National Apprentice week Aimed at 14-16 yearolds

EA1 Partners host taster daysfor young people as well asprovide online content

Promote the currentapprentice programmes

Science at Work Aimed at 12-17 yearolds

EA1 Partners sponsors Showing how science isput into practice in theworking environment

Big Bang Aimed at 12-17 yearolds

EA1 Partners sponsors engage and enthuse youngpeople about STEMsubjects

Careers TransitionPartnership day

Ex services Together with the CareersTransition Partnership EA1Partners support taster days toEx Service personnel

encourage Ex ServicePersonnel to think aboutpursuing a career in thepower industry

Career AcademyPlacements


EA1 Partners have supportedplacements for peopleinterested in engineering

One month placements forstudents

Career Wales Aimed at 12-17 yearolds and career

EA1 Partners participate in theevent

Engagement with careerinfluencers and young

ANNEX 2

influencers people

World Skills Aimed at 8-17year olds EA1 Partners support theEnvironment competition

Providing interactiveactivity as well as careeradvice

Graduate Careers Fairs Aimed at 17+year olds EA1 Partners attend a numberof graduate fairs

Promote the graduateprogrammes currently onoffer

Teachers Day in Industry Aimed at Careerinfluencers

EA1 Partners support and usetraining facilities

Promote opportunities foryounger people in thepower industry

H. Innovation Projects websites – Involvement of EA1 set out in section 3 (Innovation)

Project/ Initiative Website

DEPONS project http://depons.au.dk/

CEFAS http://cefasmapping.defra.gov.uk/Map

OWA Floating Lidar

validation

http://www.carbontrust.com/media/422195/ctc819-owa-roadmap-commercial-

acceptance-floating-lidar-technologies.pdf

TWENTIES project http://www.twenties-project.eu/node/1

Network Innovation

Allowance (NIA)

https://www.ofgem.gov.uk/network-regulation-%E2%80%93-riio-model/network-

innovation/electricity-network-innovation-allowance

ORE Catapult https://ore.catapult.org.uk/

ORI http://offshorerenewables.ac.uk/

ORJIP http://www.carbontrust.com/orjip

OWA http://www.carbontrust.com/our-clients/o/offshore-wind-accelerator#case-offshore-

wind

Power Networks

Demonstration Centre

http://www.strath.ac.uk/pndc/

Technology Strategy

Board (TSB)

https://www.innovateuk.org/

TIC http://www.strath.ac.uk/tic

ANNEX 3

Annex 3 Supply Chain Case Studies3.1 East Anglia Met Masts

Overview

In order to accurately predict the wind resource available in the EA zone,

EA1 installed two met masts.

The Shareholders sought to capture learning from the delivery of the met

masts, but also seized upon the opportunity to work with new suppliers to

the renewable energy industry – thus supporting longer term goals of

expanding support for UK project delivery.

The masts were technically challenging, but also presented a significant

supply chain opportunity, being installed in 43m of water depth, reaching to

a height of over 100m and located 40 to 60 miles from the nearest ports.

Through the delivery of the met masts the Project achieved the following

successes:

Competition

Main contract awarded on EPC basis following broad market engagement exercise. 7 tenders received.

Standard contract terms and conditions adjusted in some areas to allow wider participation in delivery.

The Wood Group was awarded the main contract for supply and installation, equating to £17M. Expanding

the UK Supply Chain by giving an opportunity to an established UK Oil and Gas company to bring their

knowledge and experience to the renewables sector.

Steel Engineering and TAG awarded sub-contracts for the major elements of manufacturing. UK

manufacturers achieved the awards for monopile and transition piece delivery.

Innovation

At over 40m water depth, one of the deepest water monopiles installed in the renewables industry. Conical

shape employed in design to save costs and reduce weights – learning employed on other projects.

Design was executed by Ramboll in their London office. Technical review was also UK based, (Offshore Design

Engineering, GHGL and London Offshore Consultants).

Integrated monopile and met mast design determined by the Shareholders in house team of experts.

Integrated design safer and more robust than separate designs that have been prone to failure.

Skills

Utilisation of East Anglia ports for O&M support – 5 years planned.

Development of new integrated design techniques, which will deliver long term solutions that are more robust

and cost effective than the traditional approach.

ANNEX 3

3.2 Wikinger Jacket Foundations – new entrant supplier

Overview

Wikinger is a 350MW project located in the Baltic Seawholly owned by SPR

Wikinger comprises 70 AREVA M5000 WTGs that willbe located in water depths ranging from 36m to 42m.Two foundation types have been proposed (Deep, TypeA, and Shallow, Type B), each foundation covering awater depth range of 3 metres.

Given the size of the fabrication order, two supplierswere required to address the scope of supply.

Competition

A competitive tender process was carried out with nine suppliers participating. The process included severalrounds of clarifications, face to face discussions and a visit to the Bidder´s facilities to be used for the Project.

Following detailed negotiations it was determined that Navantia would be one of the preferred suppliers forthe project and will have responsibility for fabricating 29 jacket foundations. This contract is expected to be inthe region of £58M (€70M).

The award of this contract to Navantia is significant given that it is a new supplier to the offshore wind marketand demonstrates the potential to transfer skills from other industries (in this instance ship design andconstruction) to create new capacity in the offshore wind market. This is particularly welcome in the jacketfabrication supply chain which is a particularly constrained area of the market.

This contract will allow Navantia to reuse one of the largest assembly yards in Europe as well as highlyqualified engineers on a new business with huge expectations of growth.

Innovation

Wikinger will be the largest offshore wind project with jacket foundations at the time of construction.

Due to small numbers of experienced foundation suppliers, ship builders were invited to prequalify withseveral being invited to tender. Multiple transition piece options were reviewed and with ship building insightsapplied EA1 has been able to optimise this part of the scope.

Skills

Development of new method statements and design optimization, using assembly-line techniques which willdeliver long term solutions for serial production of foundations and skills transfer to future projects.

ANNEX 3

3.3 West of Duddon Sands – Belfast Harbour

Overview

Belfast Harbour is the first bespoke offshore wind installation

and pre-assembly harbour in the UK, and is part of the

Harbour’s wider plans to create a renewable energy hub.

DONG and SPR leased the Harbour for the construction of the

West of Duddon Sands (WoDS) offshore windfarm – a 50/50

joint venture between the two parties. This agreement resulted

in a £50M investment by Belfast Harbour to develop a new

terminal for the assembly of offshore wind turbines and

provided a major boost for the Northern Ireland construction

and aggregate sectors.

The 50-acre facility was used to support the construction of the

WoDS offshore windfarm.

SPR and DONG have supported this excellent new facility, which

will benefit the future deployment of offshore wind and other

sectors such as wave and tidal, in coming to market.

Competition

Prior to selecting Belfast Harbour as the preferred construction harbour, SPR and DONG considered various

other options and engaged with other prospective ports.

Northern Ireland-based Farrans (Construction) Ltd was awarded the contract to deliver the new terminal by

the Belfast Harbour Company.

SPR supported Belfast Harbour Company at all stages during the harbour construction.

Construction works successfully executed from the site.

Innovation

A deep water port with no tidal restrictions offering 24/7/365 access.

The 50-acre terminal, located on the County Down side of the Port, is the largest single investment in Belfast

Harbour’s 400-year history.

The 200,000 m2 facility, is large enough to accommodate 30 football pitches.

Up to three vessels will be able to berth simultaneously with access available around the clock helping

optimise the installation plan of offshore windfarms.

Skills

The offshore wind industry plans to install a large number of turbines within 150 miles of Belfast Harbour,

thus making it well positioned geographically to facilitate the establishment of a reliable supply chain upon

which to deliver this offshore wind capacity and create a sustainable local skilled workforce.

ANNEX 3

3.4 West of Duddon Sands – Pacific Orca

Overview

SPR and DONG have an agreement in place with Swire Blue

Ocean (Swire), which covered a charter for the installation

of the West of Duddon Sands (WoDS) project.

This arrangement is a charter of a wider framework

agreement between DONG and Swire covering three

projects in total. By providing the commitment to work on

the WODs project and a further two DONG projects, this

agreement resulted in Swire investing in a state of the art

offshore wind installation vessel, The Pacific Orca (The

Orca). The Orca, is a model specific second generation jack-

up for offshore wind which works in most adverse sea

conditions, reduces the times between positions and has a

higher load capacity. The Orca was used to install the

monopile foundations and associated equipment for the

WoDS project.

This vessel has added supply capacity in a constrained area

of the market and will be utilised by the future pipeline of

offshore wind projects.

Competition

A competitive tender process was launched by SPR and DONG for the supply of an installation vessel for three

projects which included WoDS. Seven vessel suppliers participated in the process.

Following this process it was determined that Swire, a new supplier to the offshore wind market, was the best

choice for the project.

Innovation

Capable of carrying and installing up to 12 wind turbine generators each rated at 3.6MW, or 10 foundations,

the Orca is the biggest windfarm installation vessel in the world.

The vessel can be deployed to conduct windfarm installation even under extremely rough weather and sea

conditions. She is designed to withstand wind velocity of 65.6ft per second and significant wave heights of

8.2ft.

The vessel facilitates installation of offshore WTGs to a maximum depth of 197ft. She also allows installation

of windfarms with ultra-large WTGs rated at 10MW or higher capacity.

The vessel can be floated up to 56ft above the surface of the ocean using six jack-up legs fastened to the

seabed. Each leg measures approximately 345ft in length.

Pacific Orca provides accommodation for 111 people in single cabins.

The overall length of the vessel is 527.9ft.

The vessel's dead weight at 18ft draught is 8,400t.

Skills

New crew trained for this second generation jack-up and the state of the art technology, e.g. the cranes.

The learning on this project is transferrable to future projects, i.e. the crew.

ANNEX 4

Annex 4 Supplier Engagement

Supplier Engagement Classifications

EA1 has recorded details of each of the suppliers that it has engaged with and considered as a potential supplier for

the EA1 Project. To help illustrate the nature of the suppliers it has engaged with, EA1 has prepared an analysis (set

out below) which categorises each supplier into three headings (1) Established, (2) Less established, (3) New to

offshore wind. EA1 has defined less established suppliers are those who are considered to have only a small

number of credentials (i.e. involvement in fewer than 4 projects) in the offshore wind market to date. This is a

general rule of thumb which may vary for each package considering the maturity of the product and the market for

it. Whilst this categorisation includes some subjectivity, on balance EA1 considers that the conclusions reached are

representative of the supplier demographic that it has engaged with. Suppliers with no offshore wind credentials

are classified as ‘New’ to offshore wind. Suppliers who have been involved in a greater number of offshore wind

projects (four or more) are classified as ‘Established’.

Summary tables

All suppliers engaged through Market engagement activities

Grade 1 Grade 2 Grade 3 Grade 1 Grade 2 Grade 3

No suppliers

Established

offshore wind

supplier

Less

established

offshore wind

supplier

New to

offshore wind

Established

offshore

wind

supplier

Less

established

offshore

wind

supplier

New to

offshore

wind

WTG Supply & Installation 12 3 2 7 25% 17% 58%

Foundation Design 37 9 7 21 24% 19% 57%

Foundation & Pile Fabrication 104 29 13 62 28% 13% 60%

Foundation Installation 57 20 0 29 35% 0% 51%

Array Cable Supply 9 6 1 2 67% 11% 22%

Grid 8 2 1 5 25% 13% 63%

Array Cable Installation 26 9 2 15 35% 8% 58%

253 78 26 141

ANNEX 4

Suppliers invited to respond to Pre Qualification Questionnaire

Grade 1 Grade 2 Grade 3 Grade 1 Grade 2 Grade 3

No

suppliers

Established

offshore wind

supplier

Less

established

offshore

wind

supplier

New to

offshore

wind

Established

offshore wind

supplier

Less

established

offshore

wind

supplier

New to

offshore

wind

WTG Supply & Installation 6 3 2 1 50% 33% 17%

Foundation Design 8 8 0 0 100% 0% 0%

Foundation & Pile Fabrication 47 18 8 21 38% 17% 45%

Foundation Installation 24 14 3 7 58% 13% 29%

Array Cable Supply 9 6 1 2 67% 11% 22%

Grid 4 2 1 1 50% 25% 25%

Array Cable Installation N/A - not launched N/A N/A N/A N/A N/A

ANNEX 5

Annex 5 Example Roles RequiredPotential Roles

The EA1 project will require various roles throughout the project phases (Design, Construction andOperations). Examples of roles that may be required in both the EA1 project team and the Supply Chain areincluded below for reference.

Project Wide Support

Design (& Procurement)

Project Management, Document Control, Risk Management, Change Manager, Interface Manager, ProjectControls Manager, Project Programmer, Metocean Manager, Geotechnical Manger, Certification Manager,Insurance Liaison, CDM (Construction, Design Management) representative, CDM Coordinator EngineeringManagement, Site Optimisation Manager, Layout Design Engineer, Wind Resource Analyst, CAD (ComputerAided Design) Technician, Supply Chain & Procurement Management, Contract Manager, Administrator, etc.

Construction (On & Offshore)

Project Management, Engineering Management, Construction Management, Commissioning Manager, SiteRepresentative, Rigging & Lifting Engineers, Vessel Manager, Marine Co-ordinator, Yard Supervisor, MarineWarranty Surveyor, Fisheries Liaison Manager, Welding Supervisors, Coating Inspectors, Quality AssuranceManager, Quality Assurance Representatives, Health & Safety Representatives, Structural Engineer, GraduateEngineers, CAD Technicians, Supply Chain & Procurement Management, Contract Managers, Administrators,Network Controller, Permit Coordinator, etc.

Wind Turbine Generators


Project Management, Interface Manager, CDM representative, Engineering Management, SCADA (SupervisoryControl & Data Acquisition) Engineer, Supply Chain & Procurement Management, Contract Manager,Administrator, etc.


Project Management, Engineering Management, Construction Management, Commissioning Manager, SiteRepresentative, Rigging & Lifting Engineer, Vessel Manager, Marine Coordinator, Yard Supervisor, MarineWarranty Surveyor, Fisheries Liaison Manager, Welding Supervisors, Coating Inspectors, Quality AssuranceManager, Quality Assurance Representatives, Health & Safety Representatives, Structural Engineer, CADTechnicians, Supply Chain & Procurement Management, Contract Managers, Administrators, NetworkController, Permit Coordinator, etc.

Foundations


Project Management, Interface Manager, CDM representative, Engineering Management, Structural Engineer,Graduate Engineer, CAD Technician, Geotechnical Engineer, Supply Chain & Procurement Management,Contract Manager, Administrator, etc.


Project Management, CDM representative, CDM Coordinator, Engineering Management, ConstructionManagement, Site Representative, Welding Supervisors, Coating Inspectors, Quality Assurance Manager,Quality Assurance Representatives, Health & Safety Representatives, Structural Engineer, Graduate Engineers,CAD Technicians, Supply Chain & Procurement Management, Contract Managers, Administrators

ANNEX 5

Fabrication Manager, Quality Assurance Manager, Health & Safety Manager, Heavy Lift Specialist, DimensionalController, Welding Inspector, Coating Inspector, Electrical Inspector, Plater, Welder, Pipefitter, Electrician,Riggers, Crane Driver, Scaffolder, Mate, Painter, Supervision, Rigging & Lifting Engineers, Vessel Manager,Vessel Master, Marine Coordinator, Marine Warranty Surveyor, Fisheries Liaison Manager, etc.

Array Cable


Project management, Cable Design Manager, Cable Route Engineer, Engineering Manager, CDM representative,CDM Coordinator, SCADA engineer, Optic Fibre Engineer, Power Core Engineer, Quality Assurance Manager,Electrical Inspector, Supply Chain & Procurement Management, Contract Manager, Administrator, etc.


Project Management, Cable Installation Manger, Commissioning Manager, CDM representative, CDMCoordinator, Engineering Management, Construction Management, Site Representative, Rigging & LiftingEngineers, Network Controller, Permit Coordinator, Vessel Manager, Vessel Masters, Marine Coordinator, YardSupervisor, Marine Warranty Surveyor, Fisheries Liaison Manager, Quality Assurance Manager, QualityAssurance Representatives, Health & Safety Representatives, Structural Engineer, Graduate Engineers, CADTechnicians, Supply Chain & Procurement Management, Contract Managers, Administrators, etc.

Electrical Substations & HV Cable (On & Offshore)


Project management, Cable Design Manager, Engineering Manager, Interface Manager, Electrical Engineer,Structural Engineer, CDM representative, CDM Coordinator, SCADA engineer, Optic Fibre Engineer, Power CoreEngineer, Quality Assurance Manager, Electrical Inspector, Supply Chain & Procurement Management, ContractManager, Administrator, etc.


Project Management, Heavy Lift Specialist, Commissioning Manager, Senior Authorised Persons (SAP), NetworkController, Permit Co-ordinator, Platform Design Manager, HVDC (High-Voltage Direct Current) Grid Manager,Interface Manager, Certification Manager, Insurance Liaison, CDM representative, CDM Coordinator,Engineering Management, Construction Management, Site Representative, Rigging & Lifting Engineer, YardSupervisor, Quality Assurance Representatives, Health & Safety Representatives, Structural Engineer, GraduateEngineers, CAD Technicians, Supply Chain & Procurement Management, Contract Managers, FabricationManager, Quality Assurance Manager, Health & Safety Manager, Heavy Lift Specialist, Dimensional Controller,Welding Inspector, Coating Inspector, Electrical Inspector, Plater, Welder, Pipefitter, Electrician, Riggers, CraneDriver, Scaffolder, Mate, Painter, Supervision, Vessel Manager, Vessel Master, Marine Coordinator, MarineWarranty Surveyor, Fisheries Liaison Manager, etc.

Operations & Maintenance


Project Management, O&M Advisors, Modellers, Supply Chain & Procurement Management, Contract Manager


Project Management, O&M Advisors, Modellers, Supply Chain & Procurement Management, Contract Manager

Operations

Site Operations Management, Control Room Management & Operator, Marine Coordinator, HV (High-Voltage)Operator, Administrator, Warehouse Coordinator, Technical Support, Health & Safety Manager, SupplyChain & Procurement Management, Marine Logistics Personnel, Helicopter Personnel, Structural & CoatingInspector, Facilities Coordinator

WTG (Wind Turbine Generator) Supplier Management Team, WTG Technician

ANNEX 6

Annex 6 Wider Impact on Low Carbon Generation industryTo maximise the value of EA1’s work, we routinely consider its impact beyond a given project. This annex summarises EA1’s interim conclusions in this area. In this case,EA1 has considered the impact of EA1’s activities in the following specific areas:

1. Other EA zone windfarms2. Other offshore windfarms owned by SPR/Vattenfall3. Offshore windfarms owned by others4. Wave and tidal projects owned by SPR/Vattenfall5. Wave and tidal projects owned by others6. The wider low carbon generation sector

EA1 has established that there are cross-cutting and element-specific impacts, as summarised in the tables for competition, innovation and skills, below.

Competition

Action

Impact

1. Other EA windfarms

2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

Cross-cutting

Development, construction and operation of a

500-600MW project, so far from shore, in

relatively deep water to existing windfarms, with

higher voltage array cables and potential HVDC

connection.

Direct benefit in terms

of learning, shared

infrastructure and

supply chain

development for next

EA projects (an

additional 6.6GW). EA is

the only Round 3 zone

being developed

according to the vision

of large Round 3 zone

The learning

from EA1 and

supply chain

development

triggered also

applies directly

to most of

SPR/Vattenfall’s

remaining

9.8GW offshore

wind portfolio,

In terms of

generic support

to the

development of a

sustainable,

competitive

supply chain,

impact is

probably greater

than any other

single project

Learning in

terms of project

costing and

infrastructure

for very large

scale projects.

Helps develop

supply chain

also relevant to

wave and tidal

Increases

confidence in

delivery of

such large

scale

projects.

Helps

develop

supply chain

also relevant

Increases

confidence in

delivery of such

large scale

projects.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

and given continuity of

award of CfDs, staff

continuity will be

preserved where

possible.

especially its

larger Swedish

and French

projects.

Actions are in

place to

facilitate this

learning where

confidentiality

allows.

planned to be

installed in UK

waters before

the end of 2020,

due to site

characteristics.

(W&T) (e.g.

foundations).

to W&T (eg.

foundations).

Further development of open and transparent

procurement best practice. [2.6]

Drives increased

communication with us,

within EA1’s pool of

potential suppliers and

within EA1’s , openness

and competition,

enabling a wider and

stronger chain,

especially in next

generation wind

turbines and HVDC

infrastructure

Drives UK supply chain

development through

Many practices

directly

relevant to

other

SPR/Vattenfall

projects, with

same impact as

Column 1.

Good practice

will spread from

EA1 organically,

via the supply

chain and

through

dissemination via

industry

collaborations

such as

RenewableUK

and OWPB.

Same impact as

Column 2.

Many practices

are directly

relevant to

SPR/Vattenfall

projects.

Same impact as

Column 2.

Through

disseminatio

n via industry

collaboration

s such as

RenewableU

K and OWPB,

both by us

and EA1’s

supply chain.

Same impact

as Column 2.

Increases

confidence of

suppliers in the

sector more

widely.

SPR/Vattenfall

willing to share

experiences with

others and apply

successful

strategies

themselves in

related industries.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

exposing the supply

chain to full

government intent,

especially via supply

chain plan process and

OWIC/OWPB leadership

on UK content

reporting.

Same impact as

Column 2.

Set measurable targets for lifetime UK content

for EA1 and subsequent EA projects

[2.1.1]

Allow final supply contract decisions to be

influenced by the value of UK economic benefit.

During negotiations, continue to push suppliers

to maximise their UK content and demonstrate

their commitment to hitting UK content targets

for future EA zone projects. [2.11.4]

Gives framework and

early challenge to

subsequent EA projects

at a point in their

development that

enables proactive

intervention to increase

focus on UK content

throughout the

project’s supply chain.

Helps to build

sustainable UK supply

chain, hence solidifying

offshore wind in policy

makers’ thinking.

Similar

processes can

be used on

other UK and

non-UK

projects, with

the same

impact as

Column 1 for

future projects.

Methods of

assessing local

content can be

applied for

other countries,

to maximise

Good practice

will spread from

EA1 organically,

via the supply

chain and

through

dissemination via

industry

collaborations

such as

RenewableUK

and OWPB.

Same impact as

Column 2.

All practices are

directly relevant

to

SPR/Vattenfall

projects, though

Government

has not yet

established a

similar

framework.

Same impact as

Column 2.

Via the

supply chain

where

overlaps exist

and through

disseminatio

n if

Government

establishes a

similar

framework.

Same impact

as Column 2.

Good practice is

relevant also for

the sector more

widely.

Same impact as

Column 2.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

transparency.

Follow up on actions from EA1’s and EA1’s

suppliers’ supply chain plans, through to

completion of delivery. [2.8.2, 2.8.3, 2.11.4]

Gives ongoing challenge

to project team and

suppliers about

translating actions into

benefits, which will

translate also through

to subsequent EA

projects and show the

supply chain that

SPR/Vattenfall are

serious about delivery

on the supply chain

agenda.

Similar

processes can

be used on

other UK

projects, with

the same

impact as

Column 2 for

future projects.

Good practice

will spread from

EA1 organically,

via the supply

chain and

through

dissemination via

industry

collaborations

such as

RenewableUK

and OWPB.

Same impact as

Column 2.

All practices are

directly relevant

to

SPR/Vattenfall

projects, though

Government

has not yet

established a

similar

framework.

Same impact as

Column 2.

Via the

supply chain

where

overlaps

between

sectors exist

and through

disseminatio

n if

Government

establishes a

similar

framework.

Same impact

as Column 2.

Only relevant if

Government

establishes similar

frameworks

elsewhere in the

low carbon

sector.

Share best practice and lessons learned

[2.4.2 - 2.4.6]

Provide board members to key industry forums

and [2.4.5]

As long as staff retained

and processes put in

place, then many

lessons learnt are

directly applicable,

increasing competition,

reducing risk and LCOE.

As long as

confidentiality

allows, many

lessons learnt

are applicable

to other

projects, with

the same

Good practice

will spread from

EA1 organically

and also with

others who have

lessons to share

via industry

collaborations

Selected

elements of

best practice

are relevant to

SPR/Vattenfall

projects.

Same impact as

Via industry

collaboration

s such as

RenewableU

K and OWPB.

Same impact

as Column 2.

Some elements

relevant also for

the sector more

widely.

Same impact as

Column 2.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

impact as

Column 2 for

future projects.

such as

RenewableUK

and OWPB.

Same impact as

Column 2.

Column 2.

Collaborate with other project developers [2.4.6]

Construction and

operations facilities and

operational

collaborations

established for EA1 will

be relevant also for

future projects,

reducing LCOE.

The main

benefits are

available to

projects close

to EA1, but

some synergies

may be

accessible even

if sites remote.

Main benefits for

projects local to

EA1, with same

impact as

Column 1.

Little or no

benefit available

as unlikely any

projects close

by.

Little or no

benefit

available as

unlikely any

projects close

by.

Little or no

benefit available.

Work with public stakeholders to maximise

impact of public support available for suppliers,

to aid investment [2.2.3, 2.5.6]

All supply chain

investment for EA1 will

benefit future EA

projects, directly or

indirectly by increasing

competition and

reducing manufacturing

cost.

Similar benefits

translate to

other

SPR/Vattenfall

projects.

As for Column 2.

Possible benefit

available but

few areas of

likely

investment will

impact W&T

sector

significantly.

As for

Column 5.

Little benefit

available.

Both SPR and Vattenfall have relocated their UK

offshore teams to London to aid development of

Co-located teams offers

best environment for

Projects under

development

Little wider

benefit.

London office

also drives

Little wider

benefit.Little wider

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

the EA1 zone. Iberdrola, SPR’s’ parent

organisation, has also chosen to establish its

worldwide offshore business in the UK. [2.11.1]

sharing.

UK-located teams

maximise opportunity

for UK companies to

engage.

extend beyond

EA zone.

Benefits are in

line with

Column 1.

development of

W&T projects.

Benefits are in

line with

Column 1.

benefit.

Turbines

Vattenfall part owns Alpha Ventus which was the

first German offshore wind demonstration site in

2010, with six AREVA M5000 turbines and six

Senvion 5M turbines [2.3.2]

Vattenfall has been driving the EOWDC

demonstration site off the coast of Aberdeen in

Scotland for many years, as a key close-to-shore

location for accelerating new turbines and other

areas of supply to market. [2.3.2]

SPR is developing one of the largest test sites in

the world adjacent to its Wikinger offshore wind

project in Germany. Once consented, this project

will have up to 11 test sites available for turbine

installation in 2016. [2.3.2]

EA1 is planning to use a small area (3 to 5 turbine

De-risking next

generation technology

increases competition

and reduces LCOE and

risk for all projects,

including later EA

windfarms. EA1 will

have direct access to

verification

information, where

allowed under

confidentiality

agreements.

As Column 1,

but for other

SPR/Vattenfall

projects.

Direct benefit to

collaborators on

these projects;

indirect benefit

to others in

seeing new

technology

operating.

Little benefit

except in

development of

small-scale,

close-to-shore

projects.

Little benefit. Little benefit.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

locations) of EA1 as a demonstration site for

turbines of the generation after those listed

above, in order to accelerate competition for

future offshore wind projects including the wider

East Anglia zone. [2.3.2]

All three shortlisted turbines have not yet been

installed in commercial offshore windfarms

[2.12.3]

[redacted]

All supply chain


benefit future EA



competition and


cost.

Similar benefits

translate to

other

SPR/Vattenfall

projects.

As for Column 2.

Possible benefit

available but

few areas of

likely

investment will

impact W&T

sector

significantly.

As for

Column 5.

Little benefit

available.

Foundations

EA1 has brought together specific foundation

suppliers to explore partnering opportunities to

strengthen their market offering and support

necessary investments. [2.14.2]

All supply chain


benefit future EA



Similar benefits

translate to

other

SPR/Vattenfall

projects.

As for Column 2. As for Column 2.As for

Column 2.

Little benefit

available.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

competition and


cost.

Engage with EA1’s chosen foundation designer to

standardise and simplify aspects of the design for

fabrication using learning from the Wikinger &

Ormonde projects, and passing on learning from

EA1 to subsequent projects. [2.4.2]

For foundations on Ormonde and Wikinger

projects, EA1 has introduced new suppliers to

the market. [2.2.1]

EA1 will be one of the largest offshore wind

projects ever installed using jacket foundations

and presents a significant learning opportunity

for the parent companies and installation

contractor. [2.15.1]

Standardisation,

simplification, entry of

new suppliers and

sharing of learning

enables increased

competition and

reduction of cost.

Benefits obtained for

EA1 are likely to be

directly applicable to

later EA windfarms.

Many of the

benefits will be

relevant for

other offshore

windfarms

owned by

SPR/Vattenfall.

Good practice

will spread from

EA1 organically,

via the supply

chain and

through

dissemination via

industry

collaborations

such as

RenewableUK

and OWPB.

Same impact as

Column 2.

Many practices

are directly

relevant to

SPR/Vattenfall

projects.

Same impact as

Column 2.

Through

disseminatio

n via industry

collaboration

s such as

RenewableU

K and OWPB,

both by us

and EA1’s

supply chain.

Same impact

as Column 2.

SPR/Vattenfall

willing to share

experiences with

others and apply

successful

strategies

themselves in

related industries.

Same impact as

Column 2.

[redacted]

All supply chain


benefit future EA



competition and


Similar benefits

translate to

other

SPR/Vattenfall

projects.


Column 2.

Little benefit

available.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

cost.

Array cables

EA1 intends to use latest technology ~66 kV AC

array cables, with associated ~66kV protection

and switchgear. [2.16.1]

All supply chain


benefit future EA



competition and


cost.

Similar benefits

translate to

other

SPR/Vattenfall

projects.


Column 2.

Little benefit

available.

Transmission

If the HVDC option is selected ,the project will be

the first commercial use of HVDC technology in a

UK offshore windfarm, so any contracts will

significantly further develop the supply base and

drive competition relevant to the UK for offshore

HVDC substations and remove a barrier for the

whole industry. [1.1.1]

All supply chain


benefit future EA



competition and


cost. Future EA projects

are anticipated to use

HVDC transmission

technology.

The experience

gained

deploying the

HVDC converter

platform and

AC collector

stations on EA1

will provide

valuable

learning to

inform the

approach being

taken regarding

Although there

are few UK

projects planned

in the short-term

that are

anticipated to

use HVDC

transmission, as

experience

grows, costs will

fall and more

projects will use

it. Eventual

Use is likely to

be limited to for

wave farms well

into the future.

As for

Column 4.

HVDC technology

is an enabler for

transmitting

large-scale

renewable

generation round

Europe.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

transmission

options in SPR

& Vattenfall’s

future offshore

pipeline.

development of a

European

SuperGrid relies

on significant

advances in this

area, so it is of

strategic

importance for

UK to install its

first windfarm

using the

technology.

Installation and operation

Share the information gathered on local ports in

working with shortlisted installation suppliers to

develop a cohesive strategy for shared use of

ports. [2.19.1]

Engage with other offshore wind developers

around the East Anglia area to explore the

possibility of collaborating together to use land

facilities. [2.12.6]

Enter discussions with other East of England

Construction and

operations facilities, a

vibrant local supply

chain and operational

collaborations

established for EA1 will

be relevant also for

future projects,

reducing LCOE.

The main

benefits are

available to

projects close

to EA1, but

some synergies

may be

accessible even

if sites remote.

Main benefits for

projects local to

EA1, with same

impact as

Column 1.

Little or no

benefit available

as unlikely any

projects close

by.

Little or no

benefit

available as

unlikely any

projects close

by.

Little or no

benefit available.

ANNEX 6

Action

Impact


2. Other

offshore

windfarms

owned by

SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and

tidal projects

owned by

SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider low

carbon generation

sector

developers / operators with a view to forming an

“East of England Operator group” which would

offer a means for developing an efficient pipeline

of local suppliers during project

construction/operation [2.4.6]

We are seeking to establish as much access to

data and know-how as possible during EA1’s

turbine contracting activities [2.20.2]

Progress made in this

area will be directly

relevant to other EA

projects using the same

turbine supplier and

indirectly relevant to

those using a different

supplier.

The benefits of

availability of relevant

service records,

operational data and

know-how are critical

to driving competition

in O&M.

All progress can

be applied

across

SPR/Vattenfall’s

other

windfarms.

Good practice

will spread

through

dissemination via

industry

collaborations

such as

RenewableUK

and OWPB.

Same impact as

Column 2.

Many practices

are directly

relevant to

SPR/Vattenfall

projects.

Same impact as

Column 2.

Through

disseminatio

n via industry

collaboration

s such as

RenewableU

K and OWPB,

both by us

and EA1’s

supply chain.

Same impact

as Column 2.

Although issues

are often

different,

SPR/Vattenfall are

willing to share

experiences with

others and apply

successful

strategies

themselves in

related industries.

Same impact as

Column 2.

ANNEX 6

Innovation

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

Cross-cutting

Targets:

Reduce the LCOE to £100/MWh by 2020

Invest an average of £3.5M per year in

R&D/innovation in offshore wind

Tier 1 supplier investment of an average of 3%

of annual offshore wind revenues

We believe the second and third targets above

will result in a total expenditure of £50M on

R&D and innovation attributable to the project.

[3.1.2]

EA1’s potential tier 1 suppliers’ commitment to

innovation is already evident in the MOUs that

have been received to date [3.1.4]

Taking a strategic

view and investing

long-term in R&D

activity relevant to

EA1 will benefit

each EA windfarm

in due course by

helping to reduce

LCOE still further,

as long as

momentum is

preserved.

Significant

investment relates

to HVDC

transmission and

jacket

foundations,

relevant to a

subset of

SPR/Vattenfall

projects. Much of

the other

innovation relates

to almost all future

projects, with

impact same as

Column 1.

Much of the

innovation in the

supply chain

driven by these

measures will be

accessible to all.

Other developers

will need to

follow

investment in

reducing LCOE as

projects

compete for

contracts, with

impact same as

Column 1.

Experience in

taking proactive

approach will be

relevant for

wave and tidal

projects.

Limited

technology

innovation will

be applicable.

Limited

technology

innovation will

be applicable.

Limited

technology

innovation will

be applicable

outside of

marine

renewables,

except for

transmission

technology.

Project development

EA1 partners are involved in a range of key

R&D projects, including:

TWENTIES renewables integration project.

Floating LIDAR validation.

Investment in

innovations in

project

development are

Most innovations

apply also to other

SPR/Vattenfall

projects, with

There is value in

sharing results

with others to

increase industry

There is little

knock-on benefit

for wave and

tidal projects.

There is little

knock-on

benefit for

wave and tidal

Limited

technology

innovation will

be applicable

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

Wake modelling.

Bird monitoring. [3.2.1]

Innovation specific to EA1 includes:

Pioneering aerial survey.

Specific bird monitoring.

DEPONS harbour porpoise study. [3.2.2]

generally relevant

to future EA

projects, helping to

minimise

environmental

footprint whilst

maximising energy

output and

increasing

certainty of

construction costs.

impact same as

Column 1.

understanding,

especially for

projects located

in the southern

North Sea.

projects. outside of

offshore wind.

Turbine supply and installation



Offshore test site development

OWDIN offshore wind drivetrain

Innovation project.

ORE Catapult SPARTA project[3.2.3]


First significant deployment of state-of- the-art

turbines.

Nacelle mounted LIDAR trials. [3.2.4]

Investment in

turbine activities

accessible to

project developers

is anticipated to

have lasting

impact. Deepening

turbine knowledge

offers benefits

through the

windfarm lifecycle.

All benefits are

directly

transferrable to

other

SPR/Vattenfall

projects, both

future and also, to

some extent,

those operating

today.

The

demonstration of

next generation

turbine

technology is

one of the most

significant steps

in reducing cost

of energy.

Operational

information

shared in

SPARTA project

There is little

knock-on benefit

for wave and

tidal projects.

As for Column

4.

Limited

technology

innovation will

be applicable

outside of

offshore wind.

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

will improve

asset

management

knowledge and

reduce operating

costs

Foundation design, supply and installation



Monopile chalk deployment research.

Suction bucket foundation demonstration.

Pile soil analysis project. [3.2.5]


Placing the largest ever order for jacket

foundations in the market with up to three

suppliers

Collaborating closely with EA1’s chosen

fabricator(s) to investigate how the design can

be optimised for fabrication & steel weight

Working with suppliers to introduce volume

manufacturing techniques and methods to

reduce production times, manufacturing

efficiency, quality and reduce LCOE.

Using lessons learned from the Ormonde

project to inform EA1’s approach to design

The innovations

planned, coupled

with the size of

EA1 and future EA

projects offers

significant further

cost reduction

opportunities on

these future EA

projects, especially

if there is time

between projects

to facilitate

learning.

The use of jacket

foundations for

EA1 means that

technology

development for

EA1 is likely to be

highly relevant

also for other

SPR/Vattenfall

projects, whether

using the same

fabricators and

installers or not.

The benefits are

cost reduction and

increased

opportunity for UK

supply in a key

Much supply

chain innovation

will be available

to others, though

some know-how

will be retained

by SPR/Vattenfall

or shared in

industry

collaborations

where all

contribute.

Although design

drivers and

ground

conditions are

different,

important

learning can be

applied to wave

and tidal

projects, with

benefits in terms

of LCOE.

As for Column

4, but reduced

impact.

Limited

technology

innovation will

be applicable

outside of

marine

renewables.

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

standards and promote a serial production

ethos to fabrication

Maximising the opportunity within the tier 2

and 3 supply chain to standardise their offering

for primary and secondary material (steel pipes

& tubes)

Challenging EA1’s installation provider to

optimise the installation plan using the latest

vessels and installation techniques [3.2.6]

package where

today’s designs are

immature.

Array cable EPCI



OWA Cable Technical Working Group.

TSB’s Offshore Renewable Energy Catapult

projects in relation to the testing of 66kV

cables, fabrication techniques for new

innovative foundation designs and exploring

blade fatigue in relation to the offshore

environment. [3.2.8]


First to adopt new 66kV technology.

Increased early engagement. [3.2.8]

Further

optimisation of

66kV technology

will follow early

use of EA1. Future

EA projects will

gain most learning

from EA1, helping

to reduce LCOE

further still,

through improved

reliability and

optimised design.

As 66kV

technology is likely

to be used on all

windfarms with

6MW turbines and

larger, most

SPR/Vattenfall

projects will

benefit, where

information can be

shared, with the

same impact as

Column 1.

As much of the

innovation will

be in the supply

chain, accessible

to other projects,

in time benefit

will spread.

Wave and tidal

projects are

unlikely to use

offshore 66kV

technology, so

benefits will be

limited.

As for Column

4.

Limited

technology

innovation will

be applicable

outside of

offshore wind.

Grid Transmission System EPCI

EA1 partners are involved in a range of key This is a key area of The learning EA1 is Technology is not As for Column Technology is

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

R&D projects and initiatives, including:

First ever HVDC export platform in the UK

sector.

Meshed transmission networks R&D.

HVDC offshore platform joint industry

academic cost reduction study.

Trondheim HVDC emulator.

Power Networks Demonstration Centre

Network Innovation Allowance, including a

project looking at Low Frequency AC.

ORE Catapult – EA1 case study. [3.2.9]

Innovation specific to EA1 includes exploring:

Improved classic 50Hz AC systems.

Optimised DC solutions.

Low frequency alternating current.

The development of transmission technologies

from 2020 to 2030.

Shortlisted supplier innovation, including:

HVDC breaker technology

HVDC systems utilising simplified conversion

technologies

Gravity based structure HVDC platform

Over planting (under-rating of aspects of the

transmission system). [3.2.10]

learning and

technology

implementation

relevant for future

EA projects, and

benefits could be

potentially

significant in

pushing HVDC and

collector

technology to new

levels.

gained on HVDC

transmission

technology will

help inform the

future

transmission

choices made by

SPR & Vattenfall

on their future

offshore projects.

undoubtedly the

most advanced

UK project that

will use HVDC

transmission

technology.

Through all the

collaborative

projects listed,

experience will

be shared well

between

relevant players.

applicable to

tidal projects. In

the distant

future, it may be

applicable to far

shore wave

projects.

4. fundamental to

the growth of

renewables in

an integrated

Europe-wide

energy system.

Innovative procurement or contracting

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

practices


Tier 1 supplier commitment to competition,

innovation, skills & UK benefit. [3.3.1]

Turbine optimisation work stream. [3.3.2]

In addition to the

good practice

discussed under

Competition,

above, the turbine

optimisation work

stream will have

knock-on benefits

beyond EA1 in the

area of greatest

potential LCOE

reduction available

within the next 10

years or so.

Almost all benefits

are directly

transferrable to

other future

SPR/Vattenfall

projects; some

also to projects

operating today.

The acceleration

of next

generation

turbine

technology is

one of the most

important areas

in reducing cost

of energy.

There is little

knock-on benefit

for wave and

tidal projects,

through generic

learning will be

relevant if

Government

introduces

similar processed

in wave and

tidal.

As for Column

4.

Limited

technology

innovation will

be applicable

outside of

offshore wind.

Innovative installation methods

In addition to rows in the table above,

innovation specific to EA1 includes exploring:

Deep water met mast deployment. [3.4.1]

HVDC substation installation. [3.4.2]

In addition to the

impacts discussed

in relevant

packages above,

the impact of these

activities will be

directly relevant to

future EA projects.

Generally as for

Column 1.

Decreased

benefit unless

HVDC technology

(or large-scale

HVAC

technology)

used.

Low relevance to

wave and tidal.

As for Column

4.

Any technology

that helps to

decrease the

cost of HVDC

technology has

a benefit to the

wider sector.

Wider innovation in offshore wind

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

In addition to rows in the table above, activities

include:

Active role in Offshore Wind Accelerator (OWA)

exploring:

Turbine foundation designs for 30-60m water

depths

Access systems

Improving cable installation methods

Electrical and transmission systems, primarily

HVDC

Improving the layout of large windfarms to

reduce wake effects

O&M and condition monitoring. [3.5.2]

SPR is a founding member of The University of

Strathclyde’s Low Carbon and Energy

Technology Innovation Centre exploring:

Areas of electrical networks,

Onshore/offshore wind asset maintenance

Offshore foundations [3.5.3]

SPR is helping to shape Offshore Renewables

Institute (ORI), recently established by the

Universities of Dundee, Aberdeen and Robert

Gordon. [3.5.4]

These generic

collaborative

activities have the

potential to impact

future EA projects

significantly.

Carbon Trust has a

target of reducing

LCOE by 10% and

other programmes

will increase this.

As for Column 1.

As for Column 1,

as collaboration

is at the heart of

much of the

activity.

Selected

activities will

benefit the wave

and tidal sectors.

As for Column

4.

Benefits

beyond HVDC

are likely to be

limited.

Sharing of best practice or lessons learnt

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

Presence on leading innovation groups,

including OWA, ORE Catapult, ORJIP, TIC and

TSB.

Learning transfer on key construction packages,

as set out in Section 2. [3.6]

These generic

collaborative

activities have the

potential to impact

future EA projects

significantly.

As for Column 1.

As for Column 1,

as collaboration

is at the heart of

much of the

activity.

Selected

activities will

benefit the wave

and tidal sectors.

As for Column

4.

Benefits

beyond HVDC

are likely to be

limited.

ANNEX 6

Skills

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

Cross-cutting

An outline skills strategy has been prepared

and a structured approach is being taken,

assessing needs, setting targets and planning to

deliver against these. [4.1-4.3]

Taking a strategic

view will benefit

each EA windfarm

in due course by

helping to ensure

skills availability

and continuity,

thereby

maximising good

practice and

positively

influencing LCOE

and health and

safety.

Learning from this

approach will be

applicable to other

SPR/Vattenfall

projects, with

significant

movement of staff

between projects

possible. The

impact is similar to

Column 1.

Benefits are

greatest for

other windfarms

local to EA1, but

skills are mobile,

so such a

significant will

have an industry-

wide benefit,

with a similar

type of impact as

Column 1.

Many offshore

construction

skills are highly

relevant. Some

offshore wind

skills will be

applied onshore

in the wave and

tidal sectors,

during back-at-

base

refurbishment,

for example. It is

unlikely that

there will be

significant

projects located

off the East of

England,

however.

As for Column

4.

Many skills

gained will be

relevant to the

wider low

carbon sector,

the energy

sector more

generally and

beyond.

A range of skills initiatives are underway and

others are planned in engineering, graduate

training, adult retraining, skills transfer and

EA1 provides the

initial impetus, but

skilled staff will

Skilled engineering

and construction

staff will be

As working

practices

harmonise

As above, we

recognise

sufficient

The impacts of

column 3 and 4

apply.

As above. We

welcome the

involvement of

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

education about offshore wind, from at

primary schools upwards and in conjunction

with regional and national enablers. [4.4, 4.5]

then gain in

competence in

delivering EA1

which will further

benefit future EA

projects.

Progressing shared

initiatives

alongside relevant

partners under a

strategic plan

helps to empower

training providers

and ensure

training is relevant

for multiple

opportunities.

relevant to other

SPR/Vattenfall

projects.

A seeding of skilled

O&M staff can also

be used, but the

long life of these

jobs means that

further upskilling is

required to

backfill. The impact

of this activity is

similar to Column

1.

between

developers, asset

owners and

nations, the

movement of

staff trained in

one environment

to other

organisations is

likely to increase.

synergies that

the wave and

tidal sectors will

benefit

significantly from

the availability of

skilled practical

staff with

practical

experience

working on

projects such as

EA1, as those

sectors start to

accelerate in

growth.

SPR/Vattenfall

expects to use

these synergies

internally.

partners with

wider interests

in order to best

facilitate

transfer to and

from a much

wider pool of

people.

A 5 year plan for training and skills will be

requested from EA1’s suppliers as part of the

tendering process. This will be reviewed along

with EA1’s own plans every 3 months at Project

Board level with appropriate recommendations

A shared,

sustained

approach at a

range of levels in

the supply chain

Synergies and good

practice of this

approach will

benefit and can be

applied in other

The output of

this approach

will be beneficial

to all offshore

wind projects. As

For suppliers

relevant to

offshore wind

and wave and

tidal sectors, this

As column 4.

With many

synergies in

skills needs,

especially

within the

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

and actions taken to safeguard and deliver

project skills and training.[4.5.9]

Once EA1’s suppliers are selected, EA1 will start

a programme of project skills and training

assessment workshops with key suppliers to

discuss skills/training needs and share lessons

learned. Regular workshops/events will be set

up to coordinate activities across the supply

chain. [4.5.10]

EA1 will work closely with its chosen suppliers,

academic and enterprise bodies to ensure that

adequate resource is planned and delivered to

the project during the construction and the

operations and maintenance phases of the

project. [4.5.1]

ensures better

ownership by

those who most

need skilled staff

and who know

their specific skills

needs and timing

of these needs.

Due to the

similarities in all

ways of

subsequent EA

projects, this

holistic approach

will not only

provide highly

relevant staff for

these projects, but

if it continues to

be implemented

within those

projects, will help

establish long-

lasting benefit for

SPR/Vattenfall

projects directly.

The impact will be

similar to column

1.

others mirror

these sorts of

processes, EA1

hopes to benefit

also from the

movement of

staff, especially

local to the

southern north

sea, with the

same impact as

column 1.

approach will

provide a lasting

impact that we

anticipate will

help

organisations

better deliver

future skills

needs.

We anticipate

transferring good

practice where

relevant,

recognising the

scale of need is

likely to remain

quite different

for 10-15 years

and by then, the

available

workforce will

likely have many

of the skills

needed, after

wider electricity

generating

sector, this

approach will

also benefit at

this level.

ANNEX 6

Action

Impact

1. Other EA

windfarms

2. Other offshore

windfarms owned

by SPR/Vattenfall

3. Offshore

windfarms

owned by others

4. Wave and tidal

projects owned

by SPR/Vattenfall

5. Wave and

tidal projects

owned by

others

6. The wider

low carbon

generation

sector

those projects,

driving down LCOE

and improving

health and safety

records over time.

We recognise also

that having

sufficient

resources allows

learning of lessons

on projects to be

properly and

rigorously

assimilated in a

structured way for

future use.

years of

experience in

offshore wind.

ANNEX 7

Annex 7 Project Programme

Activity ID Activity Name OriginalDuration

Start Finish

EA One Delivery PlanEA One Delivery Plan 1283 16/06/2014 A 01/10/2019

Regulatory DatesRegulatory Dates 1282 18/06/2014 A 01/10/2019

A1180 TCD 1st Phase Commissioned 0 03/04/2019

A1190 Full Export 0 01/10/2019*

A1440 Planning Consent 0 18/06/2014 A

A1450 CFD Application Window 10 14/10/2014* 27/10/2014

A1470 EA One CFD 0 29/01/2015*

A1480 FID 0 29/01/2016*

GeotechGeotech 194 17/07/2014 A 14/05/2015

A1330 Geotech Survey 21 17/07/2014 A 19/12/2014

A1370 Laboratory Testing and Reporting 194 29/07/2014 A 14/05/2015

GRIDGRID 1156 22/07/2014 A 31/03/2019

A1000 Preferred Supplier 0 19/06/2015*

A1010 Contract Award 0 29/01/2016*

A1020 GRID Manufacturing 323 13/05/2016* 08/08/2017

A1030 GRID Installation 696 29/07/2016* 29/03/2019

A1040 First Power Available 0 31/03/2019*

A1050 Tender Phase 1 22/07/2014 A 19/06/2015

A1210 Detailed Engineering 225 22/06/2015 13/05/2016

FoundationFoundation 1175 01/09/2014 30/05/2019

A1060 Nominate Shortlisted Bidder 0 01/09/2014*


A1080 Jacket Fabrication 352 17/10/2017* 21/03/2019

A1090 Pile Manufacturing 428 02/07/2017* 02/09/2018

A1100 Pile Installation 90 02/10/2018* 30/12/2018

A1110 Jacket Installation 180 02/12/2018* 30/05/2019

A1120 Tender Phase (Fabrication & Installation) 231 15/12/2014* 18/11/2015

WTGWTG 1248 16/06/2014 A 12/08/2019


A1140 WTG Manufacturing 408 04/09/2017* 29/04/2019

A1150 WTG Installation - 1st Phase 47 11/02/2019* 29/03/2019

A1160 WTG Installation - 2nd Phase 45 30/03/2019 13/05/2019

A1170 WTG Installation - 3rd Phase 91 14/05/2019 12/08/2019

A1200 Tender Phase (Manufacturing & Installation) 1 16/06/2014 A 12/12/2014

A1220 Preferred Supplier 0 12/12/2014

A1230 Detailed Engineering 253 15/12/2014 18/12/2015

Array CableArray Cable 1100 26/01/2015 01/07/2019


A1400 Cable Fabrication 300 01/05/2018* 24/02/2019

A1410 Cable Installation 150 02/02/2019* 01/07/2019

A1490 Tender Phase (Manufacturing & Installation) 200 26/01/2015* 06/11/2015

PortsPorts 514 04/12/2014 23/12/2016

A1420 Port Selection 120 04/12/2014* 04/06/2015

A1430 Sign Option for Lease 0 29/01/2016*

A1460 Port Design and Construction 230 01/02/2016 23/12/2016

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2014 2015 2016 2017 2018 2019 2020

TCD 1st Phase Commissioned

Full Export

Planning Consent

14/10/2014*

CFD Application Window

EA One CFD

FID

17/07/2014 A, 17/07/2014 A

Geotech Survey

29/07/2014 A, 29/07/2014 A

Laboratory Testing and Reporting

Preferred Supplier

Contract Award

13/05/2016*

GRID Manufacturing

29/07/2016*

GRID Installation

31/03/2019*

First Power Available

22/07/2014 A, 22/07/2014 A

Tender Phase

22/06/2015

Detailed Engineering

Nominate Shortlisted Bidder

Contract Award

17/10/2017*

Jacket Fabrication

02/07/2017*

Pile Manufacturing

02/10/2018*

Pile Installation

02/12/2018*

Jacket Installation

15/12/2014*

Tender Phase (Fabrication & Installation)

Contract Award

04/09/2017*

WTG Manufacturing

11/02/2019*

WTG Installation - 1st Phase

30/03/2019

WTG Installation - 2nd Phase

14/05/2019

WTG Installation - 3rd Phase

16/06/2014 A, 16/06/2014 A

Tender Phase (Manufacturing & Installation)

Preferred Supplier

15/12/2014

Detailed Engineering

Contract Award

01/05/2018*

Cable Fabrication

02/02/2019*

Cable Installation

26/01/2015*

Tender Phase (Manufacturing & Installation)

04/12/2014*

Port Selection

Sign Option for Lease

01/02/2016

Port Design and Construction

EA One Delivery Plan

Remaining Level of Effort

Actual Level of Effort

Actual Work

Remaining Work

Critical Remaining Work

Milestone

Page 1 of 1

ANNEX 9

Annex 9 Outline Skills Strategy

Outline Skills Strategy Version 1

East Anglia ONE Offshore Windfarm Outline Skills Strategy (V1) Deadline III, Document for certification under article 33 21st October 2013

Outline Skills Strategy Version 1

Outline Skills Strategy Version 1 Page 3

1 Introduction 3 1.1 Background 4

1.2 Skills Strategy Principles 4


1 Introduction

1.1 Background

1. EAOL has provided to Suffolk County Council a Skills Letter of Intent (July 2013) (Annex 1). This letter of intent outlines East Anglia Offshore Wind’s (EAOW) approach to the development of a skills strategy in relation to the East Anglia ONE Offshore Windfarm. The key principles of which are provided below. It is these principles which will be considered in discharging Requirement 38 of the proposed East Anglia ONE Development Consent Order (DCO).

2. The following requirement regarding skills forms part of the DCO.

3. Requisition 38 states that no stage of the authorised development shall commence until written details of a skills strategy have been submitted to and approved in writing by the relevant planning authority. The skills strategy shall accord with the outline skills strategy principles.

1.2 Skills Strategy Principles

4. The objectives of the strategy shall be to:

• To ensure the necessary balance of demand for, and supply of, professional and vocational skills to support the delivery of East Anglia ONE and to leave a legacy;

• To promote employment and re-skilling opportunities in the communities most closely associated with the development of East Anglia ONE;

• To utilise existing parent company skills programmes where and when possible and appropriate;

• To make best use of existing local and national education and skills infrastructures and add value to these where appropriate.

5. The strategy shall be produced and business-led by EAOW with counsel from key stakeholders, including discussions with local authorities.


6. The strategy shall set out the interventions required to maximise the opportunities for local residents. This should include engagement with schools and colleges, pathways to higher skilled occupations and the up skilling and re skilling of workers in order to sustain employment at each stage of the development.

7. EAOW will work with the relevant planning authority to develop a delivery plan for skills in accordance with these principles.


Appendix 1

Letter of Intent with regard to Skills

ANNEX 11

Annex 11 DefinitionsAC Alternating Current

BIS Department of Business, Innovation & Skills

CAPEX Capital Expenditure

CfD Contract for Difference

DECC Department of Energy and Climate Change

EA East Anglia

EA1 East Anglia ONE Limited

EEEGR East of England Energy Group

EOWDC European Offshore Wind Deployment Centre

EPCI Engineer, Procure, Construct and Install

EWEA European Wind Energy Association

FID Final Investment Decision

FTE Full Time Equivalent

GVA Gross Value Added

GW Gigawatt

HVDC High Voltage Direct Current

IEC Iberdrola Engineering and Construction

IPR Intellectual Property Rights

ITT Invitation To Tender

kV Kilovolt

LCOE Levelised Cost of Energy

LFAC Low Frequency Alternating Current

MHV Mitsibushi Heavy Industries - Vestas

MOU Memorandum of Understanding

MW Megawatt

NIA Network Innovation Allowance

NVQ National Vocational Qualification

O&M Operation and Maintenance

OEM Original Equipment Manufacturer

OPEX Operating Expenditure

ORE Catapult TSB's Offshore Renewable Energy Catapult

OREEF Offshre Renewable Energy Emergency Forum

ORI Offshore Renewables Institute

ORJIP Offshore Renewables Joint Industry Projects

OWA Offshore Wind Accelerator

OWIC Offshore Wind Industry Council

OWPB Offshore Wind Programme Board

PQQ Pre-Qualification Questionnaire

R&D Research and Development

RTN Renewables Training Network

SPEN Scottish Power Energy Networks

SPR ScottishPower Renewables (UK) Limited

SSE Scottish and Southern Energy

STEM Science, Technology, Engineering and Mathematics

TIC The University of Strathclyde’s Low Carbon and Energy Technology Innovation Centre

TSB Technology Strategy Board

UCS University Campus Suffolk

UEA University of East Anglia

UK United Kingdom of Great Britain and Northern Ireland

UKTI UK Trade and Investment

UTC Norfolk Univeristy Technical College

Vattenfall Vattenfall Wind Power Limited

W&T Wave and Tidal

WoDS West of Duddon Sands

WTG Wind Turbine Generator

East Anglia ONE Offshore Windfarm Supply Chain Plan

Documents

Transcript of East Anglia ONE Offshore Windfarm Supply Chain Plan